Fidelity launches $500m buyout fund

The mutual fund giant is now pursuing growth buyouts alongside its affiliated venture programme. Boston and London offices are led by former Riverside and HgCapital professionals, respectively.

Fidelity Equity Partners, an affiliate of the Boston-based mutual fund giant, has unveiled a $500 million fund for buyout investments.

The firm’s North America operations, based in Boston, is led by Brooke Ablon, a former partner with buyout firm The Riverside Company. In London, the investment activity is led by Nick Martin, a former founding partner of HgCapital.

The firm is led by Rob Ketterson, who joined Fidelity’s private investment arm in 1993. He will continue to oversee Fidelity Ventures. Fidelity also has biosciences and Asia investment platforms.

The $500 million in commitments will be supplied by Fidelity and Fidelity employees.

Already the new buyout firm lists two portfolio companies on its web site: Avtek, a supplier of industrial and commercial electronic connectivity products, and PCS, a supplier of plunger lift systems and equipment.

The firm will look for deals with an enterprise value of between $50 million and $150 million, where the target companies are growing at a rate of at least 10 percent per year. In most cases Fidelity Equity Partners will seek a control position.

In many cases, Fidelity’s private investment portfolio companies are afforded the benefits of the broader Fidelity network, with Fidelity acting as a customer or a referral to a wide range of potential customers and resources.