Standard Life Investments, the private equity fund unit of the UK-based mutual insurer, has held a third close of European Strategic Partners II (ESP II), a European fund of funds.
Standard Life has closed a further E153m from investors in North America, Scandinavia and the UK. These commitments, which take the total raised for ESP II to E892m, are in addition to those previously secured from UK and European corporate and local authority pension schemes and Middle Eastern investors.
The E892m raised to date exceeds the E868m raised by its predecessor fund European Strategic Partners (ESP) in October 2000. Standard Life Assurance provided a cornerstone E500m investment to ESP II.
“Investor confidence in our private equity team is very encouraging and I hope we can continue progress towards our E1bn target for ESP II,” said Jonny Maxwell, chief executive of Standard Life Investments (Private Equity). “It’s a tough fundraising environment, but our pipeline of prospective investors is strong and we hope to have a further closing later in the year.
More than E200m has already been committed on behalf of ESPII to European buyout funds, including the Barclays Private Equity European Fund, Charterhouse Capital Partners VII, Graphite Capital VI, Permira Europe III, CapVis II, Altor 2003 and Italian Private Equity Fund IV, the latest fund from BS Private Equity which last week held a final close on E550m.
ESP II will generally invest in private equity funds which target buyouts and development and expansion capital for transactions valued in the region of E50m to E400m, with investments focussed on Western Europe. ESP II will generally aim to make investments of more than E10m in minority interests in the investee business.
Investors in ESP II can choose to participate in either a partnership exclusively made up of private equity funds and/or one consisting of at least 70 per cent in private equity funds and 30 per cent in direct co-investment opportunities.
ESP II’s mandate includes co-investment in direct transactions. Earlier this year, the fund invested E10m in Ontex, the Belgian hygiene products manaufacturer acquired by Candover for E625m at the beginning of 2003. A further investment of E15m was made into Danske Traelast, a co-investment with CVC Capital Partners. Danske Traelast is a Denmark-headquartered builders merchant and DIY retailer in the Nordic region.
“Our co-investment programme is ongoing and dealflow is strong with two transactions already in the portfolio,” Maxwell added. “It’s a great market for buying private equity deals.”