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Kennet Partners closes third fund

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Fund

Kennet Partners has closed its third fund Kennet III at more than EUR200m ($315m). The fund has a 10-year lifespan with the usual extensions. Kirkland & Ellis acted as legal counsel.

Investors

Minimum subscription was set at EUR2m and management fees at 2.5%. The Kennet executives also contributed an undisclosed sum to the fund. Among the fund's investors are Adveq, BNP Paribas Private Equity, Credit Suisse, LGT Capital and Siemens, with LGT commiting the most.

Investments

The fund will invest in the technology sector, which includes software, IT services, semiconductors and new media. It will focus on expansion deals in the US and Europe in companies that have previously received limited external funding. Investments in US-based companies are planned to make up around 30% of the fund's capital. The remaining 70% will be spread among investments in Europe, with no predetermined allocation between countries. The typical investment size will be EUR10m in exchange for a significant minority stake. The fund can invest up to EUR20m per transaction and investments are unlikely to be smaller than EUR6m. Kennet III aims to make three to four investments each year and expects the fund to be largely deployed after four to five years, when it plans to raise a new fund. Kennet Partners will continue to invest alongside other private equity groups having made 60-70% of all its investments in the past as co-investments.

Kennet III has already made two investments: EUR7m in Telemedicine Clinic, a Spanish provider of sub-specialised teleradiology services to public and private healthcare providers across Europe in 2007 and in 2008 a EUR22m recapitalisation and investment into NTRglobal, a Spanish provider of on-demand systems management software. The pipeline for further deals has been described by Kennet as healthy.

People

Michael Elias, David Carratt, Javier Rojas and Maximilian Bleyleben are the managing directors at Kennet. Mark Mifsud, Leon Santos and Justin Dolling provided legal advice on behalf of Kirkland & Ellis.

Name: Kennet III

Close: EUR200m, July 2008

Focus: Expansion, technology

Contact: Michael Elias

Address: Kennet Partners

23 King Street

London SW1Y 6QY

UK

Tel: +44 20 7839 8020

Fax: +44 20 7839 8485

Advisers: Kirkland & Ellis (Legal).

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