Hg to close latest large-cap fund above target this month

The software-focused firm has delivered an average 5.2x multiple and 60% IRR across eight exits in recent months, PEI has learned.

Hg, Europe’s third-biggest private equity firm according to the PEI 300, has made significant headway with its latest large-cap fund and expects to hold the final close on the vehicle this month, Private Equity International has learned.

Saturn 3, which has an $8.5 billion target according to PEI data, has already raised $11 billion, according to a source familiar with the fundraise.

The firm’s mid-market-focused Genesis 10 fund has closed on more than €5.5 billion and is already fully subscribed, according to the source. Its hard-cap is €7 billion, and the vehicle is continuing to raise capital.

Rede Partners is understood to be working on both fundraises.

This means Hg, which focuses on software investments, has raised almost $17 billion across the two vehicles, which launched in October 2021 and January this year, respectively. It is also expected to launch the next iterations of its small-cap-focused Mercury and private debt-focused Titan vehicles early in 2023.

According to a document shared with investors, Hg has generated around $4 billion of proceeds across eight exits in the last three months, delivering an average 5.2x multiple and a roughly 60 percent internal rate of return.

Hg ranked 17th in this year’s PEI 300, having raised $34.47 billion over the preceding five years.

The firm counts Pennsylvania Public School Employees’ Retirement System, State of Wisconsin Investment Board and South Carolina Retirement System among LPs for its latest fundraises, according to PEI data.

Capital raised by private equity funds declined to $337 billion across 622 funds in the first six months of this year, according to PEI’s first-half 2022 fundraising data. This compares with $459 billion across 1,033 funds in H1 2021, representing a 27 percent decrease by capital raised and a 40 percent drop in the number of funds that held final closes from the same period in 2021.

There were 4,055 funds in the market, targeting $1.23 trillion between them as of 20 July, compared with $703 billion across 3,060 funds at the same point last year.

Hg and Rede both declined to comment.

– Carmela Mendoza contributed to this report

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