Advent raises USD 25bn for GPE X

Rachel Lewis
24 May 2022

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Advent International has raised USD 25bn for its tenth flagship fund, which it will seek to deploy steadily over the next four-five years over 35-40 investments, Johanna Barr, managing director and co-head of LP services, tells Unquote.

The new vehicle will deploy buyout equity tickets as low as USD 100m-200m up to and above USD 2bn across four to five core sectors: business and financial services; healthcare; industrials; retail, consumer and leisure; and technology.

GPE X is 40% larger than its predecessor, GPE IX, which closed at USD 17.5bn in June 2019, making it one of the largest funds of the past year. Advent said it took less than six months to raise the fund.

Barr doesn't see any difficulty in deploying the capital, pointing to its quick three-year deployment of GPE IX as evidence that there remains plenty of opportunities in the sector. Around 90% of the capital from GPE IX is now committed, she said.

GPE X follows the USD 4bn raised by Advent Tech II in 2021, the GP's second dedicated technology fund. Advent Tech II and Advent's Latin-American fund will be able to co-invest alongside GPE X.

Despite Advent's tech fund and the proliferation of more specialist funds globally, Barr said that the GP is focused on its flagship programme.

The tech fund, she said, was a true horizontal in that investors have to know what's happening in tech to make sense of other sectors. Any other strategies would have to be similarly additive, she said.

Investments
Advent said that GPE X will be flexible to deploy capital across geographies, sectors, deal types and sizes, but Barr said it has guided investors on allocation.

The sponsor will invest 40-45% of the fund in Europe, 40-45% in America and the balance in Asia and other geographies, as it has offices in India and China, although it is not legally constrained to a specific allocation.

The split between the five key sectors will be roughly equal.

The sponsor likes complex corporate carve-outs, public-to-privates, and repeat business models, meaning it is looking to buy where it has historically invested well, said Barr. She points to speciality pharma, generics and healthcare IT as such areas within the healthcare segment.

Advent's recent take privates include its GBP 4bn buyout of British aerospace systems manufacturer Cobham in January 2020, after which it broke up the company by separately selling the antennas and mission systems arms to trade.

Notable carve-outs in Europe include the UK segment of delivery company Hermes, which it has since rebranded as Evri, and TK Elevator from industrial conglomerate Thyssenkrupp.

LPs
Overall the fund has around 350 LPs with around 85% of the capital committed to the new fund from existing LPs and the balance coming from new investors to help with diversification, Barr said.

Public and private pension funds make up the largest segment contributing 32% of the capital, followed by endowments, family offices and fund of funds at 26%. Geography-wise, 43% of the capital is from North America, 21% from Europe and 23% from Asia Pacific.

Co-investment with LPs is an option but depends on the scope of the deal, where it makes sense to syndicate some equity or a co-investor has a strategic angle like having offices in an investment location.