HgCapital raises £3.1bn in double fund close

The larger HgCapital 8 buyout fund closed on £2.5bn after five months on the road – the vehicle was officially launched in September 2016 and held a first close on £1.9bn in December. HgCapital said in a statement the fund was 3x oversubscribed.

The Mercury 2 fund was similarly oversubscribed, according to the GP. The smaller, technology-focused vehicle closed on its £575m hard-cap after launching in November 2016.

Listed trust HgCapital Trust was the largest contributor to both funds. Proskauer Rose provided legal advice, while Rede Partners advised on the placement side.

HgCapital declined to comment further on the fundraising process and the vehicles' terms and conditions.

This double fundraise follows a busy 2016 for HgCapital: the firm completed 10 new investments for a total of £950m, made seven exits and secured three refinancings. In total it returned around £1bn of proceeds to investors over that same period.

Fund 8's predecessor, HgCapital 7, held a final close on its £2bn hard-cap in early 2013. Having launched in October the previous year, the fund was oversubscribed and closed above the original £1.75bn target. The vehicle charged a management fee of 1.75% and general partners will take 20%. The first Mercury fund was meanwhile closed on £380m at the beginning of 2013.

Managed out of London and Munich, the two new vehicles will allow HgCapital to target different parts of the market. The main HgCapital 8 vehicle will target mid-market buyouts across Europe – targeting companies with EVs between £100-500m. The GP will generally look to do three or four investments per year on average over the course of the investment period. Meanwhile, Mercury 2 will focus on northern Europe, and back smaller technology businesses.

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