Apax closes in on European record

The buyout fund could set a European record, as a parallel fundraising from employees nears completion. Rival CVC Capital Partners is also hard on the heels of record holder Permira.

Apax Partners, a European buyout firm, has closed its seventh fund on its hard cap of €11 billion ($17.3 billion), according to a source close to the company. It has yet to finalise a parallel fund from its staff, which is raising an undisclosed amount, he said.

Martin Halusa:
completes Apax
transformation

The fundraising is likely to become Europe’s largest on the strength of the parallel fundraising, pipping Permira’s €11.1 billion fund, raised in 2006. European rival CVC Capital Partners is also in the market to raise approximately €11 billion for its latest fund, set to close in May, according to a source close to CVC.

Investors in the fund include SL Capital Partners, the partially independent arm of insurer Standard Life, as well as California State Teacher's Retirement System, the Oregon Public Employees Retirement Fund and the Teacher Retirement System of Texas, three US pension funds.

Apax was able to reach its hard cap on the strength of good returns from its previous European funds. The CalSTRS website estimates Apax had a 42.69 percent internal rate of return on its $4.1 billion (€2.6 billion) fifth fund raised in 2001 and a 39.95 percent internal rate of return on its €4.3 billion sixth fund raised in 2005.

The latest fundraising has completed the firm’s repositioning as a pure buyout firm. Under the leadership of Martin Halusa, Apax has gradually shifted away from its blended investment strategy and early-stage venture deals, which helped make the firm’s name when private equity was synonymous with venture capital.

Last December the firm bought the business to business division of media company Emap, alongside the Guardian Media Group, for £1 billion ($2 billion; €1.3 billion). The deal was one of the largest European acquisitions since August, as buyout firms have had difficulties securing financing following the credit crunch.     

The market has been buoyant for fundraising, despite the difficulties mega buyout firms have had doing deals since August.

Last month PEO exclusively reported that Kohlberg Kravis Roberts had closed its latest global fund on $17.6 billion. KKR is also in the market for a European fund targeting €7 to €8 billion, and it held its first close in January on an undisclosed sum, according to a source close to the company. Earlier this week Advent International raised the largest mid-market buyout fund ever raised at €6.6 billion. 

Apax Partners declined to comment. MVision, a placement agent which advised Apax, also declined to comment.