Exclusive: Magnum nears first close on Fund II

The Madrid-based firm will hold a first close of between €150m and €200 this month

Iberia-focused Magnum Capital Industrial Partners is gearing up to hold a first close on its second vehicle, PEI has learnt.

The fund, which is targeting €500 million, will hold a first close of between €150 million and €200 million this month, according to a source familiar with the matter.

Magnum – which has not been actively marketing the fund – has collected the capital from existing investors, it is understood. Following the first close, Magnum will start fundraising in the wider market, the source added.

Lazard is supporting Magnum’s latest offering. Magnum declined to comment, while Lazard did not respond to a request for comment at press time.

News of Magnum’s fundraise comes after the firm completed a secondary transaction last October when approximately 30 percent of its debut fund, a €866 million-2007 vintage, exchanged hands.

The LP stakes were purchased by approximately six or seven buyers, mainly existing investors, one of which was HarbourVest, said a source familiar with the matter. HarbourVest declined to comment.

The sellers were mainly local financial institutions that needed to cut their private equity allocations in order to lighten their balance sheets due to regulatory pressure. Magnum convinced these LPs to sell their stakes to investors that would continue to support Magnum in future funds, it is understood.

Magnum’s debut, which consist of seven portfolio companies, is fully invested. Investors in the vehicle included Espirito Santo Capital, HarbourVest, Bankia, Akina, AlpInvest Partners, Canada Pension Plan Investment Board, and California Public Employees' Retirement System, according to PEI’s Research & Analytics division.

Magnum generally targets equity investments of €50 million to €150 million in companies with an enterprise value of between €100 million and €800 million.

Magnum is not the only Spanish GP on the fundraising trail this year. Corpfin Capital is currently in market attempting to raise €200 million for its fourth fund, which is due to hit its €250 million hard-cap by the end of February, PEI revealed earlier this month. Meanwhile N+1 Private Equity is also preparing to come to market later this year in a bid to collect €500 million for its latest fund.

Last year, a number of Spanish focused managers successfully raised capital for the region. In December, ProA Capital closed its latest fund on its €350 million hard-cap, while in September, Portobello Capital raised €375 million for its third fund. In the same month, Miura Private Equity closed its second fund, Miura Fund II, on its €200 million hard-cap.

To read more about the Iberian buyout market be sure to check out PEI’s February issue which will contain a detailed country report about Spain.