Exponent holds £1bn final close on Fund III

The London-based firm has returned more than £600m to its LPs in the last 18 months

UK-based Exponent Private Equity has held a £1 billion final close on its third fund, according to a statement.

Exponent Private Equity Partners III, which came to market last spring, exceeded its £800 million (€1.39 billion, $1.46 billion) target. The oversubscribed fund held an undisclosed initial close in January.

The capital for the vehicle was raised from “a diversified group of investors” from around the world, Exponent said. The fund attracted nearly half of the capital from public and private pension funds. Approximately a third of the capital came from North American-based LPs, while 18 percent came from UK investors, 51 percent from Europe, and the remainder from investors in Australia and Japan.

Exponent put in a GP commitment of 2 percent, Richard Lenane, a senior partner at Exponent told Private Equity International. Campbell Lutyens acted as exclusive global placement agent for the offering.

Exponent’s Fund III will invest in UK-based businesses operating in the upper mid-market. It will target companies with enterprise values between £75 million and £350 million which operate in a broad range of sectors and markets, Exponent said.

Exponent was in the market in the midst of the referendum on Scottish independence as well as the upcoming UK general election. But according to Lenane, investors barely expressed worries about the political climate. “That didn’t seem to be at the forefront of their concerns.”

“For many years, the UK has been attractive from a private equity perspective,” Lenane said, adding that the UK has generally “demonstrated good returns”.

He declined to comment on performance, but Exponent’s Fund II is currently valued at 2x, while the firm’s debut fund is valued at 1.8x, according to a market source. In the last 18 months, Exponent has returned approximately £600 million to investors, the source added.

In February, Exponent listed HSS Hire Group on the London Stock Exchange having owned the business since 2012, while in January the firm sold Trainline, a UK-based online retailer for rail tickets, to KKR for between £425 million and £450 million (€588 million, $683 million).

The firm has already started to invest its new vehicle. In February, Exponent agreed to acquire global sightseeing bus tour operator Big Bus Tours in a transaction that valued the company at $340 million, PEI reported at the time.