Magnum closes its first fund at EUR866m

01 March 2008

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Fund

Magnum Industrial Capital Partners has closed its first vehicle, Magnum Capital, oversubscribed at EUR866m. The Madrid- and Lisbon-based fund has a lifespan of 10 years with a two-year extension. Credit Suisse served as placing agent, while SJ Berwin was retained as legal adviser.

The generalist fund is focused on the Iberian Peninsula, but otherwise has no restrictions except for projects in the real state and financial sectors.

Investors

The fund's investors consist of a 45% domestic (Spain and Portugal) subscription with the remaining 55% being contributed by international investors from North America, Europe and the Middle East. Half of the subscribers are financial institutions, one-third are pension funds and the remaining funds-of-funds and family offices.

Investments

Magnum has already concluded two investments, industrial support services firm Pretersa-Previsa in February this year for EUR200m and engineering company Eptisa in September 2007 (about EUR85m). The fund will carry out two to three transactions per year targeting predominantly buyout deals with enterprise value ranging EUR150-800m; EUR50-150m equity. Significant minority stakes will also be considered on a case-by-case basis. Co-investments are not seen as a core strategy. Exit routes will depend on the asset acquired.

People

The fund is co-managed by Angel Corcostegui, Enrique de Leyva, Joao Talone, Inaki Echave and Joao Borges. Prior to founding Magnum in 2006, Corcostegui served as the global CEO and first vice-chairman of Banco Santander Central Hispano from 1994 to 2002. De Leyva was managing partner at McKinsey & Co's Spanish office from 2003 to 2005, working for McKinsey in Spain, Lisbon, New York and London for more than 20 years. Talone served as CEO of Energias de Portugal (EDP), one of the main European electric utilities, from 2003 to 2006, and was also vice-chairman of HidroCantabrico following its acquisition by EDP in 2005. Echave joined Magnum from 3i Group where was a director of the pan-European buyout team based in London and Madrid and prior to that he worked for JP Morgan Partners and Bain & Co. Borges previously worked for Och-Ziff Capital Management as an investment manager in the private equity team in London. Prior to Och-Ziff, he worked for Goldman Sachs and McKinsey & Co. They are supported by a team of 10 other professionals.

Name

Magnum Capital

Target

EUR550m

Closed on

EUR866m, November 2007

Focus

Iberia, buyout, generalist

Contact

Alberto Bermejo

Address

Fortuny 14, 2 degs

Madrid 28010

Spain

Tel: +34 91 310 6342

Fax: + 34 91 319 9955

Avda. Liberdade N degs 249 -4 degs

Lisbon 1250-143

Portugal

Tel: + 35 1 210 088 280

Fax: + 35 1 218 088 281

Advisers

SJ Berwin (Legal)

Credit Suisse (Placing agent)

N+1 second fund holds final close on EUR500m

Fund

N+1 has held the final closing of its third vehicle N+1 Private Equity Fund II on EUR500m after only four months of fundraising, having met with interest by previous investors. The fund had initially set its target at EUR400m. According to the fund manager some commitments had to be scaled down to allow for other commitments to be made. N+1 will request authorisation from its current LPs to increase the size of the fund. However, it is not foreseen that this increase will exceed EUR100m. Management fees were set at 2% with carry of 20% and hurdle of 8%.

The vehicle has been established under a Spanish SCR/FCR structure and all fees will be paid by the fund. Terms and conditions have been described as standard; of carried interest, 75% will be distributed initially among the management team and the remaining 25% will be allocated at the end of the investment period, following a performance-based policy. Transaction related costs have been set at industry standard.

Investors

It is understood that most of the LPs from the previous vehicle have agreed on commitments to the new fund and will re-up their investments. The GPs will also invite a handful of international funds-of-funds to join the pool of backers.

Investments

N+1 Private Equity Fund II will replicate the same investment strategy of the company's first vehicle, which invests on a 50:50 basis with Dinamia Capital Privado, N+1's quoted fund. The fund will focus on the higher end of the Iberian mid-market buyout in companies with a controlled enterprise value of approximately EUR300m. Investments will not surpass 25% of the totality of the fund and will range between EUR30-80m in equity.

The fund plans to carry out three investments and three exits per year. Co-investments alongside LPs will be considered. Exit strategies will focus on trade sales, but will also include secondary buyouts and to a lesser extend IPOs. Proceeds will be returned to investors, who are free to decide whether or not to recycle them.

Name

N+1 Private Equity Fund II

Target

EUR400m

Closed on

EUR500m, February 2008

Focus

Iberia, buyout, generalist

Contact

Jorge Mataix

Address

Padilla, 17 - 4a planta