Closed funds re-open

Two private equity firms have recently announced that they have raised additional capital for already closed funds. Spectrum Equity, which closed Spectrum Equity Investors Fund IV on $1.75bn in July 2000, reopened the fund in March with the full agreement of all existing limited partners and held a second final close on $2bn. Spectrum invests specifically within the communications sector and has committed 30% of the total fund pool to investments within Europe. Mike Kennealy, general partner at the firm’s London office, cites a potentially worsening climate for fundraising as one of the reasons which prompted the move. With an additional $250m to draw upon, Spectrum can postpone the need to raise a follow-on fund and will also be able to make larger investments. The capital will also be used to support portfolio companies now that the exit routes for companies, especially in the telecoms sector, are no longer as clear.

In a similar move, BC Partners has raised an additional Euro 700m for its buyout fund, BC European Capital VII. The fund, which was already Europe’s largest buyout fund when it closed on Euro 3.5bn in July last year, raised further commitments from existing investors. BC Partners’ managing partner Michel Guillet has reported excellent deal flow in recent months and described the investing of the fund, of which approximately Euro 1.7bn has been committed, as ahead of schedule.

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