Vestar shuts down Europe strategy

The firm, which closed its Milan office earlier this year, has exited all but two of its European investments as it focuses on its core investment strategy, the US market.

Vestar Capital Partners is moving out of Europe, long part of its overall investment strategy, as it sets its entire focus on the US market.

The firm has closed its Munich office and will close its Paris office by the end of the year, the firm announced in a statement. It closed its Milan office earlier this year.

Europe’s volatile investment outlook drove the firm’s decision to exit the continent.

“More than a decade ago, we saw an opportunity in Europe and successfully pursued it,” managing director Robert Rosner said in a statement. “However, markets change, so we need to remain flexible and adapt our model.”

The shuttering of Vestar’s remaining European offices represents a shift in the firm’s overall strategy. The firm marketed its most recent fund, Vestar Capital Partners VI, as targeting management buyout, growth equity and recapitalisation transactions in the US and Europe, according to documents from the 4 November 2010 meeting of the Washington State Investment Board.

However, the firm has not made an investment in Europe in more than four years, according to a source with knowledge of Vestar.

Rosner, who had been the president of Vestar Europe, will return to the firm’s New York office. Vestar is planning to grow its US staff, according to the statement. Vestar declined to comment beyond the release.

The firm has been drawing down its presence in Europe over the past several years, according to the statement. Vestar has exited all but two of its European investments, AZ Electronic Materials and Seves SpA.

Vestar is currently marketing its sixth fund, which is targeting $3.5 billion for mid-market companies in the consumer, financial, healthcare, and diversified industries sectors. Fund VI’s predecessor, which raised $3.65 billion in 2005, was generating a 1.2x multiple and an about 5 percent net internal rate of return as of 31 March, according to SWIB documents.

Vestar was founded in 1988 by seven principals from The First Boston Corporation’s Management Buyout Group and manages more than $7 billion in committed capital, according to the firm’s website.