London-based European mid-market investor Silverfleet Capital has closed its first fund as an independent entity, having raised €665 million.
The former captive private equity arm of UK financial services firm Prudential had originally targeted €1 billion for the vehicle, but tough fundraising conditions required the firm to revise its target.
This, as revealed exclusively to PEO sister publication Private Equity International this month, is not a problem for Neil MacDougall, Silverfleet’s managing partner, who is happier investing a smaller fund today’s contracted deal market. “We would be worried if we actually had to invest €1 billion in this market,” he said.
The fund has three-and-a-half years of its investment period remaining, for which it will invest €200 million per year. According to MacDougall, this is “consistent with [Silverfleet’s] long-term historic investment rate”.
The €1 billion “aspiration”, as MacDougall described it, was arrived at when Silverfleet first began talking to investors around the beginning of 2008: a time when limited partners were considerably less capital constrained.
“The market was tough,” said MacDougall. “We had potential investors keen to commit who went all the way through to the legal stages – and then December valuations came through for their investment portfolios and they ended up completely sunk by the denominator effect.”
Known since formation in 1986 as PPM Ventures, Silverfleet’s management team bought itself out in November 2007 – though the new name was not unveiled until the following May. Until now, Silverfleet has focused on managing around €700 million of existing private equity investments on behalf of Prudential’s UK Life fund.
Read the interview in full in the May edition of Private Equity International.
Toby Mitchenall contributed to this report.