The attractiveness of the European mid-market was underlined again today with the announcement that Close Brothers Private Equity (CBPE) has capped its latest fundraising at £360 million (€528 million; $649 million).
CBPE managing director John Snook said the fundraising was accomplished in just six months, which he said was “unexpected”. He added: “We put in a considerable marketing effort and it paid off. We have got some great names in the fund.”
Snook added that the composition of the investor base provides a great contrast to ten years ago, when the firm only had UK-based investors. This time around 45 percent of commitments came from the US, with the remaining 55 percent equally divided between UK and continental European investors.
Investors in the fund included AIG Global Investment Corp, AlpInvest Partners, Danske Private Equity Partners, JP Morgan Fleming, Lockheed Martin Pension Fund, New York State Teachers Retirement Fund and Scottish Widows.
The firm was advised on the fundraising by Berchwood Partners, a New York-based fund placement specialist.
Snook said CBPE will now consider a maximum transaction size of £100 million, slightly higher than the £75 million maximum it stipulated when investing its previous £202 million fund. However, the minimum transaction size will remain at £10 million. “That is important to us because we want to retain the ability to invest over a wide spread of mid-market deals,” said Snook.
CBPE, which has €1 billion of funds under management, focuses on investments in business support services, specialist manufacturing, leisure and tourism, and transport and logistics.
CBPE’s success reflects continuing institutional appetite for European mid-market propositions, with UK-based funds being among the most popular. Last year, Graphite Capital raised a £375 million fund 25 percent ahead of its target amount. Earlier this month, smaller mid-market fund Sagitta Private Equity capped its fundraising effort at £105 million.