Graphite nears first and final close

It is understood the UK-headquartered firm will reach its £475m target over the summer, according to a source familiar with the matter.

Graphite Capital Partners, a UK-based firm, is likely to reach its £475 million target for its eighth buyout fund over the summer, according to a source familiar with the matter. 

It is understood the firm, which has been pre-marketing the fund in the last few months, is publishing its private placement memorandum shortly. 

Graphite is not using a placement agent, the source told Private Equity International. 

Graphite declined to comment. 

The firm has made a string of exits prior to its latest fundraising efforts. In May, Graphite sold Dominion Gas, a Scottish oilfield services company, to Praxair, a New York-listed industrial gases group, for approximately £100 million. This investment, which was made in 2007 from its £375 million Graphite Capital Partners VI, a 2003 vintage, generated a 2.3x return. In April, Graphite sold care home provider, Optimum Care, to Four Seasons Health Care, a UK-based elderly and specialist care provider. 

In November last year, Graphite sold TileCo Group, a UK-based supplier of tile, mosaic and stone products. Last October, Graphite divested recruitment group NES Global Talent to AEA Investors. The exit multiple was undisclosed, but it was “an excellent return”, Mike Tilbury, a senior partner at Graphite, told PEI at the time. 

Graphite, which typically invests in businesses between £25 million and £200 million, is investing its £475 million Graphite Capital Partners VII 2007 vintage. The most recent acquisition from this fund is a £30 million investment in Explore Learning, a UK provider of tuition for primary school children, in August last year. It is understood the fund is now 75 percent deployed. 

Some LPs in fund VII include: AlpInvest Partners, Finnish Local Government Pensions Institutions (KEVA), Greater Manchester Pension Fund, Maryland State Retirement and Pension System,Quartilium/Groupa ma Private Equity, Scottish Widows Investment Partnership, State of Wisconsin Investment Board and West Midlands Pension Fund, according to PEI’s Research and Analytics division. 

A 'one and done' close for Fund VIII would put Graphite in the company of a select few other firms that have enjoyed lightning-quick marketing efforts. Marlin Equity Partners, for example, raised $1.6 billion for its fourth fund in about four months earlier this year, while KPS Capital Partners hit its $3.5 billion hard-cap in April, just three months after launching its fourth fund. 

It's a reflection of a market of 'haves' and 'have-nots', with only a rare few firms enjoying seemingly effortless capital raising campaigns, while other firms, including some historic names in the industry like Apax Partners, Kohlberg Kravis Roberts and Actis, have had to deal with extended fundraisings and in some cases, cutting their targets.

Christopher Witkowsky contributed to this report.