Exclusive: Exponent nears £500m first close

The firm has recently come to market to raise £800m for its third fund

UK-based Exponent Private Equity is nearing a first close of approximately £500 million for its third buyout fund, PEI has learnt.

The firm will be holding the first close in a month’s time, according to two sources familiar with the matter. Exponent recently came to market targeting £800 million (€1.01 billion, $1.3 billion) for the vehicle, which has an £1 billion hard-cap.

London-based placement agent Campbell Lutyens is supporting Exponent with the fundraising, it is understood. Both Campbell Lutyens and Exponent declined to comment.

Exponent is currently investing its £805 million second fund, which it raised in 2008. Investors in that fund included Los Angeles County Employees' Retirement Association, Massachusetts Pension Reserves Investment Management Board (MassPRIM), New York Life Insurance Company, Pantheon, Alaska Permanent Fund and OMERS Private Equity, according to PEI’s Research and Analytics division.

Exponent typically invests in UK-based businesses with an enterprise value of between £75 million (€91 million, $125 million) and £350 million. Exponent’s current portfolio includes Quorn, a UK meat-alternative food business, Gorkana Group, a monitoring business for corporates and PRs, and Immediate Media Company, a UK consumer magazines publisher. In March, Exponent agreed to buy a majority stake in The Loch Lomond Distillery Company for an undisclosed sum. Last October the firm sold its majority stake in The Ambassador Theatre Group to Providence Equity Partners in a deal that valued the business at £350 million, netting Exponent a 5.2x return.

News of Exponent’s fundraising comes as a number of firms successfully raised capital for the UK recently. Last week, Inflexion Private Equity raised £1.05 billion for two investment vehicles. Inflexion’s flagship fund, Inflexion Buyout Fund IV, closed on its hard-cap of £650 million, while Inflexion Partnership Capital Fund I, which will make minority investments in the UK mid-market, closed on its hard-cap of £400 million.

Last month, ECI Partners closed it tenth fund on its £500 million (€626 million, $823 million) hard-cap, while in August, Sovereign Capital closed its fourth fund on its £395 million (€497 million, $655 million) hard-cap.