Warburg closes Fund XI on $11.2bn

The global growth investor has deployed about 20% of the fund, which closed after roughly 18 months in market.

Warburg Pincus has held a final close for its Fund XI on $11.2 billion, marking one of the largest buyout funds to close since the financial crisis of 2008.

Warburg Pincus Private Equity XI had an official target of $12 billion but the firm decided to close the fund after 18 months in market, and within one year of its first close, rather than continue the fundraising process, according to a source with knowledge of the situation. Warburg attracted commitments from a combination of new and existing investors, with a “significant number” of LPs coming from outside the US, according to a statement.

Warburg did not use a placement agent for the fund. 

The firm will invest Fund XI using the same global strategy as its prior funds, backing growth companies in its target sectors of energy, financial services, healthcare, technology, media and telecommunications and consumer, industrial and services. Warburg has invested roughly 20 percent of Fund XI to date.

Warburg invested about $2.3 billion in 28 new companies in 2012 and distributed $6.2 billion back to LPs. During the first quarter of 2013, the firm returned an additional $3 billion back to investors. 

Warburg’s Fund X was generating a 1.15x multiple and 5.5 percent internal rate of return as of 30 September 2012, according to documents from the Oregon Public Employees Retirement fund

Other buyout firms in market with funds targeting $10 billion or more include The Carlyle Group, which is expected to reach its $10 billion target for Fund VI later this year, UK-based CVC Capital Partners, which has raised about $10.75 billion for its CVC European Equity Partners V that is targeting $12 billion and Apollo Global Management, which is in market with its Apollo Investment Fund VIII targeting $12 billion, according to Private Equity International’s Research & Analytics division.