Warburg Pincus VIII exceeds target

80 per cent of contributions to the firm’s $5.3bn global private equity fund have come from repeat investors.

Those looking for signs of life in private equity fundraising will have spotted plenty in recent weeks.

A week after UK buyout firm Cinven closed on E4.3bn for its third fund, leading international house Warburg Pincus said today it raised $5.3bn, $300m above target, for WP VIII, a global fund to be invested in the US, Europe and Asia.

It is the tenth private equity fund that Warburg Pincus, which has been active since 1971, has raised. Launched in February 2001 with a target of $5bn, WP VIII proved a convincing proposition to limited partners who had invested in WP vehicles before.

For investments outside the US, WP can also draw on a $2.5bn international fund, which will invest alongside the new global vehicle.

According to Ed McKinley, a managing director with responsibility for the firm’s European business, existing limited as well as new investors showed a “pleasing reaction” to the fundraising given the current climate. 80 per cent of commitments came from existing core investors.

Charles R. Kaye, co-president, commented: “The foundation for this success was based on long-standing relationships with our core investors. The fact is that we distributed more than $10bn in cash and securities to our investors in 1999 and 2000 and almost $2bn since then.”

WP VIII will invest in buyouts as well as early stage investment opportunities. “We believe that the climate for both growth and late stage investments is better now than it has been for some years”, said McKinley. WP concentrates on industry sectors including financial services, IT, healthcare and life science, energy, real estate, business processing, communications and media.

To reinforce its activity in the latter, WP also announced the appointment of Sir Christopher Bland, the current chairman of British Telecom and former chairman of the BBC, as a senior advisor.

Sir Christopher’s relationship with the firm dates back to the 1980s, when WP invested in London Weekend Television, then run by the BT chairman. Sir Christopher will spend up to two days a week evaluating investment proposals and advising on the existing portfolio of media and communications investments.

WP is an investor in a number of UK media companies including Comcast UK Cable, Esprit Telecom Group and Channel 5 Broadcasting.

To date, the firm has invested $2.5bn in 64 companies in 14 European countries. In total, WP has invested more than $12.2bn globally since inception.