* Reaches fund limit of 6.5 billion euros
* Largest fund by European firm since credit crisis
* BC investor base expands 60 percent
By Simon Meads
LONDON, Feb 21 BC Partners has
raised 6.5 billion euros ($8.6 billion) for new deals, making
the largest buyout fund any European private equity firm has had
since the onset of the credit crisis.
Even with the region's markets roiled by the sovereign debt
crisis in Greece and other euro zone nations, BC Partners raised
more than it had expected, providing a ray of hope for a raft of
other big private equity firms aiming to tap picky investors for
Only U.S. group Blackstone has been able to raise a
larger pool of capital, gathering $16 billion for its latest
fund, a process that took four years.
The new fund will enable BC Partners, which started life as
the private equity arm of Barings Bank, to keep up its deal
rate, having been among the most active in Europe last year,
with four takeovers including Italian fashion retailer Gruppo
Coin and mobile phone shop Phones 4u.
BC Partners, which also owns Swedish cable group Com Hem and
embattled sports club operator Fitness First, has been raising
its ninth buyout fund since 2010, under the guidance of managing
partner and former Goldman Sachs banker Charlie Bott.
It tapped new investors, including sovereign wealth funds in
the Middle East and Asia, for the fund, its largest to date,
which was oversubscribed and took 18 months to complete.
The fund eclipses that of Swedish rival EQT, raised last
year, and will provide encouragement to others including Cinven
, Permira and Apax Partners, that
they can successfully raise new capital, even though the process
can be long and hard, with concessions often needed on fees.
Buyout firms were so flush with cash that they routinely
turned away investors at the height of the buyout boom five
years ago. Now the boot is on the other foot, as their
traditional backers such as pension funds, banks and insurers
have less capital to invest.
It takes two to three times as long to raise a private
equity fund as at the height of the boom as investors take their
time, Bott said in a telephone interview.
"Their investment committees are requiring them to produce
incredibly thorough information, comparing us to other firms
they could invest in, and that takes more time," Bott said.
Private equity firms raised $263 billion in 2011, sightly
less than in 2010, according to data firm Preqin, and a far cry
from the height of the buyout boom leading up to 2007, when they
pulled in around $600 billion a year.
As a result, firms have been offering investors concessions
on fees to encourage them to commit capital early.
BC Partners offered the first wave of investors a 5 percent
reduction in management fees and carried interest -- the bonuses
paid out to private equity executives.
Investors are increasingly focused on the strength of a
private equity firm's team and its track record, Bott said.
Since its foundation in 1986, BC Partners has made investors
about three times what they put in, ranking it as a consistent
But it has had its high-profile troubles too, buying into
London estate agent Foxton's just months before the market
crashed, wiping out much of its initial investment.