Martin Currie, the Edinburgh-based fund manager, has revealed plans to relaunch fundraising for its second private equity fund of funds vehicle, which was postponed earlier this year after falling significantly short of its target. The fund was pulled, having raised only around £20 million (&€29.6 million; $35.6 million) of a £150 million target. In the aftermath, Paul Murray, who was hired from DB Capital Partners in February 2003 to head up private equity and oversee the fundraising, departed the company. He was replaced at the helm by existing team member Hamish Mair.
In an interview, Mair spoke of plans to revive the fundraising later this year. He said: “The fundraising has been put on the shelf because we did not reach the minimum total we needed to make it viable, but it has not been stopped. We shall be considering re-launching but no final decision has been taken yet. It will be based on market conditions and they are probably a bit better now than they were pre-Christmas.”
Mair also said he was hoping to add one more full-time member of staff to the current private equity team of three. Mair, who worked for merchant bank Robert Fleming in London before moving to Martin Currie's Far East team in 1990, works alongside assistant director Neil Sneddon, who was previously at Arthur Andersen, and analyst Anna Vandor.
The fund was earmarked as the successor to the &€170 million Martin Currie Capital Return Trust fund of funds, which was set up in March 1999 and made commitments to a number of European and US-based fund managers including Candover and Hicks, Muse, Tate & Furst.
A spokesperson at Martin Currie said Murray had left “to pursue other opportunities”. Prior to joining Martin Currie, he was a founding partner at DB Capital Partners, where he led the firm's investment in the &€4 billion leveraged buyout of Jefferson Smurfit alongside Madison Dearborn. Prior to DB, he had spent 11 years at 3i, including a spell as head of its Scottish buyout business.
Asked about Martin Currie's prospects of reviving its fundraising, one London-based limited partner said: “Mair's a good quality individual but the fundraising environment looks far from easy for the foreseeable future: all the available capital is being gobbled up by the larger players like Pantheon and Harbourvest. Having said that, things can't be any worse than last year, when raising money was like pushing water uphill.”
GRESHAM'S FUND III CLOSES ON £235M
The UK mid-market private equity house has announced a final closing of its Gresham III fund on £235 million (&€348 million; $414 million), above its original £200 million target. The fund, which was launched in May 2003, is Gresham's first fundraising since gaining independence from Zurich Financial Services and includes a £75 million cornerstone investment from Zurich. Just short of 20 institutions invested in Gresham III including pension funds, banks, insurance companies and fund of funds from the UK, Europe, Asia and the US. Commitments came from Access Capital, Alpinvest, ATP Private Equity Partners, Bank of Scotland, Eagle Star Life, Henderson Global Investors, Swiss Re and Wilshire among others.
The fund will concentrate on UK lower mid-market buyout transactions across a range of generalist sectors. International Private Equity Limited acted as placement agents for the fundraising and London law firm Macfarlanes provided legal advice.
FINATEM'S FUND II HOLDS €74M FIRST CLOSE
The Frankfurt-based, mid-market private equity firm has held an initial close of its second fund on &€74 million ($88 million). Finatem Fund II was launched at the beginning of the year and has attracted new investors, alongside the cornerstone investors from Finatem's &€63 million first fund, which is fully committed. The fund is on course for a proposed final target of &€125 to &€150 million and will focus on mid-market buyout opportunities in manufacturing businesses in German speaking countries. Finatem II has made one investment to date. In December 2003, the fund invested &€11 million in Baerbel Drexel, a German consumer healthcare company. Fund I has made five investments to date. Christophe Hemerle, managing director and founding partner of Finatem said: “We are very pleased with the first stage of our fundraising campaign. We anticipate more support from LPs as we prepare for some attractive exits later this year.”
ACTIS TO INVEST C$200M IN AFRICA
The private equity investor in emerging markets has been selected to comanage the C$200 million (&€122 million; $145 million) Canada Investment Fund for Africa. The fund, which will be launched later this year, will comprise C$100 million from the Canadian government, with a similar amount to be raised from third party investors. CDC Capital Partners, the UK-based emerging markets investor is understood to be investing C$30 million in the fund, alongside a commitment of C$15 million from the fund co-manager, IFPT Management, a Montrealheadquartered portfolio company that manages emerging market funds for Canadian pension plans.
SOROS BACKS NEW EUROPEAN VENTURES
Soros Private Equity, the global private equity business of Soros Fund Management LLC, has signed a cooperation agreement with Jaime Bergel, formerly managing director of Goldman Sachs and chairman of Merrill Lynch for Spain and Portugal, and Carlos Tejera, a high-profile Spanish financier. The agreement is a prelude to the setting up of an investment vehicle “which will happen within the next few weeks”, according to Rafael Ladreda, who will be the main executive of the new group. Under the deal, Soros will cornerstone the industry-agnostic fund, with additional capital to be secured from third parties. Portuguese venture capital companies invested a total of &€101 million ($120 million) in 2003.
Soros has also backed Presidio, a pioneering Italian mezzanine fund which recently announced it had raised &€50 million from institutions. In May, Miltos Kambourides, a former partner at Soros Real Estate Partners, announced the launch of Dolphin Capital Partners LP, a &€100m property fund targeting the leisure sector in Greece, Cyprus, Turkey and Croatia. Kambourides said Dolphin had elicited preliminary pre-launch commitments from potential investors such as private banks and high net worth individuals with whom it is currently in discussions.
MOWBRAY LAUNCHES EUROPEAN VENTURE FOF
Mowbray Capital, the European fund of funds firm founded by Guy Fraser- Sampson in 2003, has announced the launch of Mowbray European Venture LP. The European-focused venture fund of funds vehicle is seeking to raise between &€100 million ($119 million) and &€300 million. The Mowbray team will personally invest one percent of total commitments to the vehicle, which the firm expects to attract pension funds, life assurance companies and banks as limited partners. The fund will target predominantly European investors and will not initially be trying to raise capital from US sources. “Europe can match or even exceed US returns once Europeans begin to accept and adopt the more successful US model and recognise it is a top decile game and that it is a few big winners which drive returns,” Fraser-Sampson said.
BREGAL COMMITS &€250M TO EGERIA FUND
Bregal Investments, a vehicle that invests on behalf of the wealthy Brenninkmeijer family, has committed &€250 million ($300 million) as a cornerstone investor in the second fund raised by Dutch mid-market private equity firm Egeria. Egeria Private Equity Fund II is aiming to raise between &€400 million and &€450 million in total by the end of 2005.
According to Egeria managing partner Jan Niessen, the firm will initially seek commitments from Dutch institutions it “knows well” before widening the net to “large continental European institutions, including funds of funds.” Egeria, founded by Niessen and fellow managing partner Peter Visser in the late 1990s focuses on Dutch-based businesses and businesses “with a Dutch link.” Niessen said it would target enterprises worth between &€50 million to &€150 million from the new fund.
BVCA WARNS OF PENSION CRISIS
The British Venture Capital Association (BVCA) has written to the Government, calling for proposed amendments to the Pensions Bill to be dropped. Under the proposals, a pensions regulator would be appointed, from January 2005 with wide-ranging powers to ensure that pension funds aren't undersubscibed. The regulator, who would have retrospective powers dating back to June 2003, could plug gaps in under-funded pension schemes, by forcing directors and shareholders of the company to make good any shortfalls if that company purposely disposes of money that should have gone to the pension fund.
John Mackie, chief executive of the BVCA said in the letter: “We believe (the changes) could have a disastrous effect on our members' ability to raise capital for investment, particularly from the US. Private equity firms could be exposed to unlimited liability for shortfalls in pension provision.”