Hutton Collins, the London-based investor in European private equity backed transactions, has announced the final closing of its debut fund. The firm, which was founded in 2002 by Graham Hutton and Matthew Collins, raised €235 million ($285 million) in total.
Investors in the fund include blue chip institutions Adams Street Partners, Pantheon Ventures, Northwestern Mutual, Credit Suisse First Boston, Bank of Scotland, Morgan Stanley clients and Martin Currie. Transparent Capital acted as placement agent.
Capital Z Investment Partners, the US fund investor, is also invested in the fund. The group bought out Abbey National, Hutton Collins’ original cornerstone investor, in February 2004.
Hutton Collins describes its strategy as targeting internal rates of return of between 18 to 25 percent by investing in a mix of junior mezzanine and “senior equity” instruments, either in private equity backed deals or sponsorless transactions.
According to a statement, the firm has so far deployed €90 million ($110 million) in four transactions. In 2002, the fund invested in the £860 million acquisition of Coral Eurobet, a UK bookmaker, in a deal led by Charterhouse. That same year, the firm acted as joint arranger of a €300 million facility to back the same sponsor’s purchase of Telediffusion de France, a French operator of broadcasting towers.
In 2003, the firm participated in the £290 million take-private of UK restaurant chain Pizza Express, which was led by TDR Capital and Capricorn Ventures. It also backed Advent International’s takeover of Radio 538, a Dutch radio station.
Another four investments are expected to complete “in the near future,” the firm said. Recent newspaper reports cited Hutton Collins as the frontrunner in the auction of Wagamama, the UK restaurant chain currently being sold by Graphite Capital.
Earlier this year, Hutton Collins partially realised its investments in Coral and Pizza Express. The firm continues to hold warrants in both transactions, which it believes carry “significant value”, according to the statement.
When it launched its fund in 2002, Hutton Collins originally set out to raise €600 million. In 2003, the firm lowered the target substantially, citing adverse market conditions. Given investors’ reluctance to back first-time funds, raising €250 million would be a satisfying result, the firm said at the time.
The lower-than-originally-planned amount raised means Hutton Collins is likely to return to the fundraising fray before long. “Given the rate of investment, it is likely that Hutton Collins will launch its second investment fund during the course of 2005,” the firm said.