London-based private equity firm BC Partners took a risk when it bought UK estate agent, Foxtons. The buyout firm, which acquired the estate agents for £390 million (equivalent to €446 million; $611 million today) in 2007, knew the market couldn’t keep going up. As a result BC Partners budgeted for a 30 percent slowdown in sales.
Reality though proved more severe, with Foxtons suffering a 70 percent slump in sales.
A subsequent restructuring – including a fresh equity injection of nearly £50 million last December – saw BC Partners lose a controlling stake in the company to lenders.
The good news is that BC limited its investment in Foxtons to below 2 percent of its current fund, BC European Capital VIII. With the €5.8 billion vehicle, raised in May 2005, now almost fully committed, BC is likely to begin raising its next fund later this year, according to PERE’s sister magazine PEI. It will seek up to €6 billion, and will look to tap up new investors in the Middle East and Asia in addition to European and US LPs.
There is life after Foxtons, it seems.