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Shinsei star eyes $3.5bn for fund

One of the chief architects of the Shinsei Bank turnaround, J. Christopher Flowers, is halfway toward a target of $3.5bn for a financial services private equity fund.

JC Flowers & Co., a New York private equity firm led by well known investor J. Christopher Flowers, is in the market with a private equity fund that has a target of $3.5 billion (€2.8 billion), according to limited partner sources.

The fund, JC Flowers II LP, will target financial services acquisitions around the world. The firm’s founder and head, J. Christopher Flowers, was one of the chief architects of Japan’s Shinsei Bank deal, considered by many to be one of the most successful private equity deals of all time. After buying Long-Term Credit Bank of Japan in 2000 for $1.2 billion, a consortium led by Flowers and Tim Collins’ Ripplewood Holdings are set to realise roughly six times that amount as their position in the renamed Shinsei is unwound.

Flowers is the former head of Goldman Sachs financial services group. He left to launch his own investment firm in 1998, at which point he began working with Collins and others on the Shinsei deal.

According to an LP source, the Shinsei deal is by far the most successful transaction listed in the JC Flowers PPM, with a 6x return on capital. Another realised deal, culminating in the 2004 sale of an interest in Greentree Investment Holdings, yielded a 1.6x multiple after a holding period of less than a year.

JC Flowers I, the firm’s predecessor vehicle, has over $900 million in commitments, according to publicly available sources.

The firm’s most recent deal was the acquisition of Dutch merchant bank NIB Capital from ABP and PGGM for €2.1 billion (€2.6 billion).

According to a source close to the fundraising, JC Flowers is receiving great interest from limited partners and the effort is “doing extremely well”. A separate source said the firm was roughly halfway to the fund’s target of $3.5 billion.

Flowers himself is committing $200 million to the new vehicle. Several JC Flowers-related entities are also committing, including Bermuda insurance platform Castlewood Holdings. Castlewood, which is committing $75 million, is partially owned by The Enstar Group, and Flowers is Enstar’s largest shareholder.

A source said Shinsei Bank would commit to the new JC Flowers fund.

The fundraising is being spearheaded by the placement arm of Credit Suisse.