Advent International, an international private equity firm with offices in 15 countries, has announced the final close of its sixth global buyout fund at the hard cap of USD10.4bn in capit
Advent International, an international private equity firm with offices in 15 countries, has announced the final close of its sixth global buyout fund at the hard cap of USD10.4bn in capital commitments.
The fund, GPE VI, is the largest mid-market buyout fund ever raised, the ninth-largest buyout fund overall and Advent’s largest to date. Like its predecessor GPE V, which closed with commitments of
USD3.3bn in 2005, the new fund will continue Advent’s strategy of investing in mid-market to upper-mid-market companies primarily in Europe and North America.
Focusing on businesses with enterprise values of between USD300m and USD1.5bn, with the occasional larger transaction, the fund is expected to make 30 to 35 investments.
GPE VI exceeded its original target capitalisation of USD7.8bn by more than 30 per cent and was still significantly oversubscribed, with more than USD15bn of interest from investors. The fund brings Advent’s total capital raised since its launch in 1984 to more than USD23bn.
‘We are extremely pleased with the strong support we received from both existing and new investors and the speed of the process,’ says Bruce Barclay, the Advent managing director who led the fundraising.
‘This has been achieved despite the debt market turmoil and stock market declines, which have concerned some investors and slowed a number of other fundraisings. We were able to have effectively a first and final close on March 12 and then waited a few weeks primarily for some investors who have new fiscal years beginning in April.’
GPE VI will be deployed by a team of 69 investment professionals in Western Europe and North America, with support from nearly 50 other Advent deal personnel in Central and Eastern Europe, Latin America and Japan.
The fund will concentrate on international buyouts, strategic restructuring opportunities and growth buyouts. As with previous funds, the GPE team will seek to drive profit growth in portfolio companies through operational improvements, strategic repositioning and market expansion, both domestically and internationally. Target sectors remain business and financial services; retail, consumer and leisure; healthcare; technology, media and telecoms; and industrial.
‘Our strategy of concentrating on fundamentals and earnings growth in portfolio companies has proven itself across economic and financial cycles for more than two decades, as well as in multiple geographical regions and sectors, and our investors recognise that,’ says David Mussafer, managing partner of Advent’s North American buyout group and a member of the firm’s executive committee. ‘We are not, and never have been, heavily reliant on financial arbitrage to generate returns, which is clearly important to investors in the current turbulent environment.’
The GPE Program has delivered consistent returns across five generations of funds and several economic and private equity cycles. Its 18-year track record is marked by a history of realisations encompassing 136 full and partial exits out of 159 total investments since 1989. In aggregate, Advent has completed more than 200 private equity transactions valued at more than
USD36bn.
A total of 160 investors participated in GPE VI. The fund received strong support from Advent’s existing investors, who committed roughly two-thirds of the total capital. Geographically, 42 per cent of the capital was raised from North American investors, with 41 per cent coming from Europe, 11 per cent from the Asia-Pacific region and 6 per cent from the Middle East.
Eight of the largest investors by committed capital are the Canada Pension Plan Investment Board, GIC Special Investments, AlpInvest Partners, Pantheon, the California State Teachers’ Retirement System, SL Capital Partners (formerly Standard Life Investments Private Equity), the Universities Superannuation Scheme and Partners Group.
