Lehman Brothers Private Equity Partners Limited (LBPE), a closed ended private equity fund-of-funds investment company, has achieved its target of raising USD 500 million through an IPO on
Lehman Brothers Private Equity Partners Limited (LBPE), a closed ended private equity fund-of-funds investment company, has achieved its target of raising USD 500 million through an IPO on Euronext Amsterdam NV’s Eurolist of 50 million shares at USD 10 per share.
In addition, LBPE has granted the Sole Global Coordinator an over-allotment option of up to USD 50 million, or 5 million shares. Conditional dealings were expected to commence on 18 July and unconditional dealings on 25 July 2007.
The proceeds of the IPO will be committed to a diversified portfolio of private equity fund investments and certain direct private equity investments selected by Lehman Brothers’ Private Equity business (the Investment Manager).
LBPE expects to acquire a portfolio of private equity assets diversified across private equity asset class, geography, industry, vintage year and sponsor for an aggregate purchase price of approximately USD 260.5 million, and assume related unfunded commitments aggregating approximately USD 354.1 million.
The offering has been structured to align the interests of the investors and LBPE:
* In addition to bearing the IPO costs, Lehman Brothers has undertaken to subscribe to USD 145 million of LBPE shares in the IPO, which will be subject to a 3-year lock-up.
* Lehman Brothers will bear the underwriting, placement fees and other expenses associated with the IPO to ensure that 100% of gross proceeds are available for investment.
* Management fees will be charged on invested capital only; there will be no fees on cash or unfunded commitments.
The capital structure has been designed to minimise cash drag, utilising a credit facility to be entered into after closing, to support a prudent over-commitment strategy intended to allow LBPE to maintain full investment.
Since inception in 1987, the Investment Manager has achieved an Internal Rate of Return of 18.1%, net of fees and expenses on its primary private equity fund investments and coinvestments.
Lehman Brothers International is Sole Global Coordinator. Joint Bookrunners are Lehman Brothers International, Hoare Govett Limited and UBS Investment Bank. Co-managers are Banco Urquijo and Crèdit Andorrà.
Joe Malick, Managing Director, Lehman Brothers Private Equity, says:
‘We are delighted by investors’ response to LBPE’s IPO. We believe that investors were attracted to our excellent long-term track record in private equity as well as our carefully developed structure, including the absorption of listing costs by Lehman Brothers.
‘We have also been encouraged by our existing clients’ appetite to supplement their exposure to Lehman Brothers’ Private Equity investments by investing in LBPE. Their feedback suggests that investment in liquid private equity products is critical to supporting a balanced exposure to this important asset class.’
