UK fundraising update: name-brands push on through

Following the Conservative victory in the UK general election in December 2019 and the renewed sense of certainty that swept the political landscape, UK-based GPs announced a slew of fund closes and launches in the early months of 2020.

Despite the coronavirus crisis, many PE and VC investors are continuing in this vein, with some expected to hold closes in the coming months. As seen elsewhere in Europe, though, a number of these are name-brand managers (with vehicles often targeting investments outside the UK too), which are currently thought to be better able to navigate constraining conditions for fundraising.

In April, Unquote reported on a number of large US institutional investors approving commitments to CVC Capital Partners VIII, ranging from €50-100m, as the GP hits the trail in the hopes of raising €17.5bn. CVC is still targeting a first and final close by the end of June this year, Unquote understands.

Bridgepoint Development Capital IV, which is part of Bridgepoint's growth capital strategy, was announced in February 2020 and held a first close in the week commencing 4 May 2020 towards its target of £1bn. The fund has a significantly larger target than its predecessor, BDC III, which closed on £600m in June 2016, above its target of £500m.

Meanwhile, Trilantic Europe is expecting to hold a dry interim close for its sixth-generation fund shortly, with commitments exceeding €500m, Unquote understands. The fund has a target of €1bn and was launched around a year ago – it held a first close in December 2019.

In the large-cap market, a source close to the situation confirmed that BC Partners is still fundraising as expected for its European Capital XI vehicle, which was announced in January 2020 with a target of €8.5bn.

Hg, which is currently raising three funds, is expected to hold final closes for them all in the coming weeks, according to a report by Bloomberg. The firm is said to have raised $1.5bn for Hg Mercury 3, and $5bn for Hg Genesis 9 and Hg Saturn 2 each.

Soldiering on
Several firms at the smaller end of the market are also pressing ahead with fundraising and expect final closes in 2020.

In the venture space, C5 continues to raise its Cyber Partners II fund, which has held periodic closes and will hold more in the future towards its target of $200m. The firm is expecting to make new deals in May, according to a source close to the situation.

Another venture investor, Frog Capital, is aiming for a September close for its European Growth II fund, which held a first close on €50m in November 2019.

In the small-cap buyout market, Unquote understands a final close for Kennet Partners V is expected in the coming weeks, towards its €200m target.

Elysian Capital's third-generation vehicle is expected to hold a first close in June 2020 towards its target of £300m, according to a source close to the situation.

Dunedin, which registered its fourth-generation fund in July 2018 with a target of £300m, according to Unquote Data, is also still on the trail, a source close to the situation told Unquote.

Delays expected
Inevitably, timescales have slipped for other managers, though. Capdesia, an investor in the European food service sector, has delayed fundraising, but still expects to hold a final close in September, according to a source close to the situation. The GP will resume conversations with LPs in June, in the wake of a number of opportunities emerging in the sector due to the coronavirus crisis, said the source.

Prior to the outbreak, Kester Capital was expecting to hold a final close for its second-generation fund on its hard-cap of £100m in H1 2020; however, the GP now expects to hold a close later in the year, according to a source close to the situation.

Sovereign Capital has delayed the fundraising process of its fifth-generation fund, which has a target of £600m, Unquote understands. The GP's previous fund, Sovereign Capital IV, closed on £395m in August 2014.

When it comes to the future fundraising pipeline, Charterhouse initially expected to launch its next vehicle in June; the process is understood to be likely to occur following the release of Q3 results. Charterhouse XI will have a target of €2.5bn.

Around 60 funds in the UK and Ireland are either fundraising or in pre-marketing, according to Unquote Data. GPs in the market include Foresight, Silverfleet Capital Partners, Livingbridge, IK Investment Partners and Palatine Private Equity, though it is unclear whether they have delayed their processes.

Bridgepoint, Trilantic Europe, BC Partners, Hg, C5 Capital, Frog Capital, Kennet Partners, Elysian Capital, Dunedin, Capdesia, Kester Capital, Sovereign Capital, Foresight, Silverfleet Capital Partners, Livingbridge, IK Investment Partners, Palatine Private Equity and Charterhouse all declined to comment.

With additional reporting from Harriet Matthews and Greg Gille

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• Topics
• Funds
• Buyout
• UK / Ireland
• coronavirus
• United Kingdom
• Bridgepoint
• CVC Capital Partners
• HgCapital
• Trilantic Capital Partners (previously LBMB)
• BC Partners
• Frog Capital
• Foresight Group
• Livingbridge
• Silverfleet Capital
• IK Investment Partners
• Palatine Private Equity
• Charterhouse Capital Partners
• Kennet Partners
• Elysian Capital
• Kester Capital
• Dunedin
• Sovereign Capital