Exclusive: Charterhouse collects €1bn for Fund X

Charterhouse Capital Partners has held an initial close of €1 billion for its latest fund, PEI has learnt.

The firm’s managing partner Lionel Giacomotto updated investors on fundraising developments at the Charterhouse investor conference held at The Grove in Hertfordshire on Thursday, according to a source with knowledge of the matter. The firm is likely to hold a first close during the summer, the source added.

Charterhouse declined to comment.

The pan-European firm officially came to market in January when it published its private placement memorandum. The firm is targeting €3 billion for Charterhouse Capital Partners X. 

Charterhouse has had some good performance to show to investors. It has realised €3.5 billion since January 2014. The firm’s Fund IX is currently valued at 1.8x and has a 30 percent IRR as of March 2015, according to the source.

The initial four exits from Fund IX, a €4 billion 2008-vintage, have delivered an average realised return of 3.3x. Charterhouse netted a 2.6x return and a 21 percent IRR on Deb Group, a 5.2x return and 47 percent IRR on Card Factory, a 3.4x return and 40 percent IRR on Wood Mackenzie and a 2.1x return and a 30 percent IRR on Bureau Van Dijk. The firm has realised an average 2.2x since 1994.

The initial close comes after a turbulent year for Charterhouse in which it became embroiled in an ongoing legal battle with one of its former directors.

Former Charterhouse director Geoffrey Arbuthnott alleged that Charterhouse shareholders tried to force him to sell his stake in the firm for £1.5 million in November 2011, which he claimed was far too low. Arbuthnott had owned 8.91 percent in the holding company of Charterhouse and claimed his stake was worth £8 million.

Last year, a judge in the Chancery Division of London’s High Court rejected his claims and said there “there had been no oral agreement and no unfair prejudice”. Arbuthnott has since appealed but the judgement is not expected until later this year.

The case lifted the lid on Charterhouse, which despite being one of the oldest private equity firms in the world, remains a very private firm and discloses very little information about its investment strategy.

Arbuthnott’s witness statement revealed how the succession of Gordon Bonnyman, who led the firm between 1990 and 2011, when Lionel Giacomotto became managing partner, was handled.

When fundraising for CCP VII, Charterhouse’s €4 billion 2006-vintage fund, Bonnyman named Arbuthnott as his successor if unforeseen circumstances caused him to retire, Arbuthnott claimed.

Last year, Charterhouse also lost two of its portfolio companies. In October 2014, the firm lost control of PHS, while in July 2014 it handed Vivarte to creditors.