Partners Group, the Zug-based fund of funds manager, has held a first closing of its latest Fund of Funds (FoF) aimed at mid-cap European buyout funds.
The initial closing has raised E160m, ahead of expectations, and counts UBS Group and a number of other large European institutions among its investors. The firm is planning to commit to 15-20 small and mid-cap European buyout funds.
Partners Group, which has funds under management in excess of E4bn, will make investment in funds in the E100-400m size range, investing between E15-20m per fund. The firm said in a statement that it believes that the small- to mid-cap market in Europe will generate attractive returns in what it describes as a ‘highly fragmented’ sector in comparison with the larger buyout funds, which often see strong competition for the best deals.
Up to 15 per cent of Partners Group Europe LP is also being set aside for secondary deals, highlighting what some see as a growing trend toward increased secondary activity in Europe. The firm also said that it intends to make 15 per cent of the fund available for co-investment opportunities.
Partners Group says it is hoping to capitalise on the increasing level of corporate restructuring taking place in Europe, as seen this week with France Telecom’s E180m disposal of Stellat, a wholly-owned satellite subsidiary, to Eutelsat. Many of Europe’s largest conglomerates are looking to dispose of well-managed and profitable businesses to reduce debt burdens. France Telecom for instance is currently attempting to reduce its E60bn-plus debt by E17bn.