ECI hits £700m hard-cap on Fund XI

ECI Partners has held a final close on its eleventh flagship buyout fund on its £700 million hard-cap ($929 million; €791 million), Private Equity International has learned.

ECI 11 had a £650 million target and reached the hard-cap 80 days after launch, a spokesman for the firm told PEI. The fund was materially oversubscribed and attracted 25 institutional investors, with an 80 percent re-up rate from its predecessor.

ECI collected £512 million for Fund 10, a 2015-vintage, according to PEI data. LPs included California State Teachers’ Retirement System, British Airways’ Airways Pension Scheme and Greater Manchester Pension Fund.

The new vehicle will target UK mid-market growth opportunities of between £20 million and £150 million. ECI has generated a 2.5x gross multiple and 36 percent gross IRR across 106 realisations since 1990, the spokesman added.

UK fundraising has been mixed since the Brexit referendum. Seven partners resigned from Lyceum Capital in January after the firm pulled its fundraise and pivoted to a deal-by-deal investment strategy.

In August, sources told PEI the European Investment Fund, which committed to Lyceum’s third fund, had halted investments in UK private equity firms until the outcome of the referendum to leave the EU becomes clearer. The decision left a “reasonably sized hole” in the UK private equity market, according to a placement agent source familiar with the EIF. A spokesman for the EIF denied that a moratorium was in place, saying that “due diligence on [UK funds] now needs to be more thorough, and take into account a wider range of factors”.

Carlyle’s portfolio companies in the UK and potential targets have had a tendency to slow down on investment decisions in the wake of Brexit, Marco De Benedetti, co-head of European buyout at the firm, told PEI in March.