For the past six years, ATP Private Equity Partners in Copenhagen has been building a private equity fund investment platform, one painstaking step after another. Now, ahead of a new fundraising campaign, the group has opened its first overseas office in New York.
Leading the US team is Klaus Rühne, a partner, who in February moved to New York with his family.
Going global was the next logical step for the private equity arm of Danish pension manager ATP, says Jens Bisgaard-Frantzen, the managing partner. The group's portfolio of leading private equity groups is mostly made up of US and European managers, and physical proximity to the US market had been on the agenda for some time.
“Clearly it is our experience that private equity is about personal relationships. Building US relationships from Copenhagen has been a success, but we think we can deepen them by being there,” says Bisgaard-Frantzen.
Since its inception in 2001, ATP PEP has invested in venture capital funds and buyouts, and is determined to carry on with the dual strategy. Says Rühne: “From the start, we've been knocking on the doors of the best firms in the US venture hubs. We will continue to do that.”
On the buyout side, the strategy is “size agnostic”, so long as the portfolio is diversified. The US buyout market, though mature, is deemed attractive, because “sector-specific funds” are more common than in Europe, and because understanding the US market is critical in order to succeed in global industries such as telecoms.
Once fully operational, the US team will seek to make direct co-investments and secondary purchases, in addition to primary commitments. Starting with Rühne and a junior colleague, ATP PEP aims to have a team of five professionals in the Big Apple.
The expansion comes as the group contemplates the creation of its third fund of funds. ATP PEP II, a €1 billion programme funded entirely by ATP, was launched in April 2005 and is approximately 80 percent invested. A third programme is expected to get underway in the second quarter of this year.
For Rühne, the move to NYC marks a return to US soil. 25 yeas ago, he tells PEI, he worked in California – first as a dishwasher, than in a raisin factory.
ABINGWORTH CLOSES RECORD LIFE SCIENCES FUND
UK-based venture capital firm Abingworth Management has closed a £300 million (€446 million; $588 million) life sciences fund, the biggest such vehicle ever raised in Europe for investment in this sector. The final close exceeded the initial target of £250 million. MVision acted as placement agent. The fund, Abingworth Bioventures V, will make investments of up to £20 million in biotechnology and medical companies, and will invest about 50 percent in Europe and 50 percent in the US. Abingworth, which is run by Stephen Bunting, was founded in 1973. It has €1 billion under management and operates from offices in the UK and the US (see p. 33).
GRAPHITE LAUNCHES £400M FUNDRAISING
Graphite Capital, a UK mid-market firm, has kick-started its latest fundraising, targeting about £400 million (€598 million; $781 million). The fund is expected to close in the first half of 2007. Graphite's most recent fund, Capital Partners VI, raised £375 million from 39 global institutional investors, and closed in June 2003. Founded in 1991, Graphite manages more than £750 million. It recently sold UK noodle bar chain Wagamama to Lion Capital, generating an IRR of 40 percent.
INVESTCORP TO RAISE $1BN BUYOUT FUND
Investcorp, a Bahrain and Londonlisted alternative investment firm, is planning to raise a $1 billion private equity fund later this year. Investcorp raised $527 million (€406 million) from investors in the second half of 2006. The firm is expected to realise a substantial return on its investment in Apcoa, a German car parking company, after the business attracted several first round bids of more than €700 million. However, it recently suffered a setback when losing about £250 million (€373 million) after a restructuring of Polestar, a European printing company backed by the firm.
3I TO LIST £1.3BN INFRASTRUCTURE FUND
Listed private equity group 3i is planning to float an infrastructure fund on the London Stock Exchange to raise up to £1.3 billion (€1.98 billion; $2.56 billion) to invest in infrastructure assets. The deal will include a £325 million commitment from 3i's balance sheet. It will buy out most of 3i's current infrastructure assets and have first refusal on all future infrastructure deals generated by the group. The vehicle will be advised by 3i's current infrastructure team, led by Michael Queen.
HENDERSON CLOSES SECOND PFI FUND
Henderson Equity Partners, the London-based private equity business of Henderson Global Investors, has closed its second private finance initiative on €859 million ($1.13 billion). Guy Pigache and Paul Woodbury are running the fund, which will specialise in the secondary market for operational private finance initiative projects. The fund has already bought John Laing, a UK manager of public sector infrastructure assets, in a £886.9 million deal in December. The firm closed its first private finance initiative fund in October 2005 on €480 million. Henderson Equity Partners has about £800 million (€1.2 billion) under management.
CAPMAN RAISES €110M
CapMan, a listed Finnish private equity firm, has held a first close of £100 million (€131 million) on a new fund that will target technology companies in the Nordic region. The fund, CapMan Technology 2007, is targeting a final close of €150 million, and aims to make between 15 and 18 investments. The firm said it will contribute €15 million from its own balance sheet to the fund. CapMan has €2.9 billion under management.
SVG LAUNCHES HEDGE FUND
SVG Investment Managers, the asset management business of private equity specialist SVG Capital, has launched a hedge fund that uses private equity strategies. The firm plans to seed the SVG European Absolute Return Fund with €20 million from its balance sheet and cap it on €200 million. It will list on the Irish Stock Exchange in April after an extensive road show run by the firm's broker UBS. Structured as a European long/short equity hedge fund, the fund's investment objective will be to generate a return in excess of 15 percent per annum from an average of 35 to 40 stocks in both long and short positions.
INDEX RAISES €350M FOR LATEST FUND
Index Ventures, a European venture capital firm with offices in London and Geneva, has closed a €350 million ($460 million) fund and appointed three new partners. The fund was “many times oversubscribed” from existing investors alone, according to Index partner David Rimer. The firm chose to extend the offering to “a small group of new investors”, particularly in the US, in order to diversify its investor base.
Index's success is in stark contrast to other European venture capital firms who have struggled to raise money in recent years. The new fund is the firm's fourth and takes capital under management to more than €1 billion. The firm has also beefed up its advisory capability by recruiting two former entrepreneurs to the partnership. Saul Klein, the founder of Video Island and a former marketing vice president at Skype, joins Index as a venture partner, as does Mark De Boer, the founder of PanGenetics. The firm has also promoted to partner Michèle Ollier, who joined Index's life sciences team in 2006 after an early career in the pharmaceutical industry.