Cinven nears first close for €5bn fund

UK-headquartered private equity firm Cinven is nearing a first close for its latest fund, likely to be on about €2.5bn - half the target amount for the vehicle.

Investors in The Fifth Cinven Fund include New York State Teachers’ Retirement System and Pennsylvania Public School Employees’ Retirement System, both of whom are existing Cinven LPs. New York has committed €100 million to the fund, according to its website, while the School Employees’ Retirement System of Ohio, another LP in the new vehicle, has approved a €30 million commitment.

Cinven is the latest GP to offer an ‘early-bird’ discount to investors committing to the fund before a first close, with LPs already committed earning a 5 percent rebate on management fees, according to a source close to the process. The source added that the firm was on track to hit its target of €5 billion next year. Cinven declined to comment on the fundraising.

Cinven sent private placement memoranda to LPs in July, having earlier told investors of its intention to begin raising new capital at the annual LP meeting in March, according to an investor source. There is no hard cap for the fund.

The strong fundraising performance comes on the back of significant returns for the firm and its LPs. Cinven is understood to have returned €2.4 billion to its investors already this year on the back of exits like Amadeus (7x) and Phadia (3.4x).

A source close to the fundraising process said LPs had been attracted to the firm due to its ability to identify European companies within its target sectors that are poised to take a lead role in consolidation of those industries. Through its Asian portfolio team, it is also able to help European companies build a presence in Asia through joint ventures, the source said.