HarbourVest throws Motion lifeline

Alice Murray
15 January 2014

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HarbourVest Partners has extended the life of Motion Equity Partnersт fund to enable it to exit portfolio companies.

The new deal has awarded Motion with a generous four additional years to realise its current portfolio, which comprises investments made between 2005 and 2010.

Talks over the fund extension began in November, following Motion's failed attempts to raise a new vehicle. According to reports, the fund extension deal gave LPs a choice between offloading their stakes in the fund at a discount or remain as investors for the next four years. According to Reuters, around half of the LPs took the cash option.

Companies in Motion's current portfolio include petrol distributions systems business Tolkheim, food ingredients manufacturer Diana, vending machine services company Gruppo Argenta, utility services provider Morrison Utility Services, marketing agency Fullsix International and pet food and accessories retailer Arcaplanet. All investments were made through the firm's 2005 fund, which totalled €1.25bn and was raised when the GP was known as Cognetas.

Cognetas rebranded in April 2012 to Motion Equity Partners, in a move which saw the embattled manager closing down its London and Frankfurt offices and focusing on the French and Italian markets. The firm suffered setbacks in recent years and was forced to relinquish control of several investments.

The transaction is a significant development not only for Motion, but for the industry as a whole, as several brand names are struggling to raise new funds and are instead surviving on management fees. These so-called zombie funds are threatening continued LP interest in the market. Read our in-depth analysis here.