BC Partners raised €6.5 billion ($8.6 billion) for leveraged buyouts in Europe, surpassing its target thanks to demand from sovereign wealth funds in the Middle East and Asia.
BC European Capital IX, which will target controlling stakes in “defensive growth” companies, was oversubscribed and is 14% bigger than the previous one, the London-based firm said Tuesday in a statement. Sovereign wealth funds provided 25% of the commitments, up from under 10% in the last fund.
“I am delighted with the enthusiastic response from existing and new investors from around the world, particularly in the context of a challenging fundraising environment,” Charlie Bott, head of investor relations and a managing partner, said in the statement.
BC Partners was one of the first private equity firms in Europe to return to investors in 2010 to raise money for a new fund after the financial crisis stymied deal-making. Initially targeting €6 billion, it offered a 5% discount on fees for investors who committed money before its first close in early 2011, people with knowledge of the matter said then. It also agreed to end transaction fees, billed each time the firm or one of its companies makes an acquisition, to lure investors at a time when lack of distributions made them reluctant to commit to new pools.
The firm said it secured “a substantial amount” of commitments from the majority of existing investors, though didn’t disclose the actual percentage. Existing investors who chose to “re-up” did so with pledges 25% smaller than last time, Mr. Bott said in a telephone interview.
About 40% was raised from backers in North America, 30% in Europe and 30% in Asia and the Middle East, the firm said. About 37% of backers are pension funds and fund of funds 12%.
The BC Partners fund will focus on European investments and can invest as much as 25% outside of Europe, which would primarily be in the U.S., Stefan Zuschke, a managing partner, said separately in a conference call Tuesday.
“We now have sufficient ammunition to invest and that gives us an advantage to some of our competitors,” Mr. Zuschke said. “It was worth it to be the first out of the gate.”
