Barclays Private Equity closes on €2.4bn

The UK private equity arm of Barclays Capital has closed its third European fund, having raising the entire capital from existing investors.

Barclays Private Equity has closed its third European mid-market fund on €2.4 billion ($3.3 billion). The fund was raised entirely from existing investors based in Europe, the Middle East, Asia and the US.

Brian Blakemore

London-headquartered BPE received €1.7 billion from 25 third-party investors including Allianz Private Equity Partners, LGT Capital Partners, Standard Life Investments and SVG Advisers. It also received a €650 million investment from parent Barclays Capital.

Brian Blakemore, BPE’s investor relations director, said: “We didn’t have to market the fund at all beyond our existing investors. This was also true of the fundraising for our second fund and so our investor base is pretty well identical from that of our first fund.”

The new fund will invest predominantly in the UK, France, Germany, Italy and Switzerland, although it can also invest in other parts of Europe. It will invest in the UK across Barclays’ preferred sectors including financial services, healthcare and support services, while in continental Europe it will pursue a generalist approach.

Demand for the fund had been strong, Blakemore said: “It would have been very easy to have raised more money than we needed by advertising the fund, but the only way to sensibly deploy that money is to do bigger deals outside our €25 to €250 million focus.” BPE currently invests about €800 million per year and is capable of doing deals of up to €500 million in size.

Commenting on current market conditions, Blakemore said: “We have had an active period both in the terms of new transactions and also in terms of realisations. Despite problems for larger deals due to problems in the debt markets, in the mid-market it is business as usual.”

BPE’s recent exits include the IPO of UK estate agent LSL Property Services in November 2006, which raised £211 million ($428 million, €308 million). BPE had bought LSL for £60 million in July 2004 and retains a 29 percent stake in the business. More recently, in June 2007, BPE sold German employment agency TUJA Group to trade buyer Adecco for €800 million.