* Fundraising beats Advent's 7 bln euros target
* Targets Europe, North America and Asia
* Buys companies valued at 200 mln to 2 billion euros
By Simon Meads
LONDON, Nov 12 Advent International has amassed
8.5 billion euros ($10.8 billion) in one of the biggest private
equity fundraisings since the financial crisis, helped by the
U.S. group's strong track record on returns.
Private equity firms, which raise money to buy businesses to
sell them later at a profit, have had a difficult time since the
crisis partly because bank financing for their debt-funded deals
has become scarce and returns have come under pressure.
The buy-out sector raised some $600 billion a year in 2007
and 2008, but brought in less than $300 million in the last 12
months, according to data group Preqin.
But Advent, whose deals include buying Royal Bank of
Scotland's payment processing business WorldPay, has
bucked the trend after showing investors it had outperformed the
pack with superior returns.
Advent's sixth fund, raised in 2008, has delivered a 12.4
percent annualised return, according to figures to the end of
March from one of its investors, California State Teachers'
That compares with a 10.8 percent annualised return for
rival CVC's 2008 fund, and a 5.8 percent return from Permira's
2006 fund, according to the same data.
"We recognised on going out to raise a fund that it is quite
a challenging environment. There are a lot very difficult
decisions being made on the part of (investors) today on who
they will fund and who they will not fund," Bob Brown, managing
director and global head of limited partner services.
Advent has raised far more than the 7 billion euros planned
initially, making its new fund the biggest since it was founded
The new fund - Advent's seventh Global Private Equity Fund -
cements the Boston-based company's position as one of the
leading global buyouts firms and gives it money to spend for the
next five years on medium to large-sized companies worth between
200 million and 2 billion euros.
While a handful of firms, including Blackstone and CVC, have
raised larger funds since the onset of the credit crisis, Advent
has been faster than its rivals, taking around nine months to
raise its new pool of capital.
Private equity firms including Apax Partners,
Cinven and Permira all started raising
capital before Advent -- which does deals in Europe, North
America and Asia from its flagship fund -- and are still
Advent has agreed a swathe of deals in Europe in the last
month, including the buyouts of German retailer Douglas
, Dutch medical supply company Mediq and
Polish retailer EKO Holding.
The firm has historically invested about 60 percent of the
capital raised in Europe, said Brown.
"We like the fact that some people are quite negative on
Europe and some are turning their backs on the market," Brown
Some U.S. rivals, such as TPG, have reduced their
emphasis on buyout deals in Europe, preferring to look for deals
in other regions. Others like KKR have said they see
attractive deals to be done on the continent.
Advent also buys companies in Eastern Europe and Latin
America through dedicated funds for those regions.
However, not all forays into new regions have been
successful for the firm.
Advent closed its office in Japan last year and wound up the
$725 million fund it had for deals in the country, finding it
impossible to penetrate the private equity market.
Advent was founded by Chairman Peter Brooke, who spun the
group out of TA Associates, a private equity firm that
specialises in taking minority stakes in fast-growing companies.