TowerBrook Capital Partners, formerly the private equity arm of Soros Fund Management, has defied tough fundraising conditions to close its third fund on $2.75 billion after 11 months of marketing.
The firm held its first close for TowerBrook Investors III in March on $1.7 billion and subsequently surpassed its initial target of $2.5 billion. UBS acted as placement agents.
New investors accounted for 50 percent of the commitments, as the cornerstone investor form the previous fund, billionaire financier George Soros, significantly reduced his commitment to Fund III.
Amongst Fund III’s limited partners include Euronext-listed fund of funds Conversus Capital and US pension fund the San Francisco Employees’ Retirement System, which committed $30 million in August.
TowerBrook’s fund close comes as LPs are finding it increasingly difficult to commit to new private equity funds. The so-called “denominator effect” – when pension funds find themselves over-allocated to private equity because their other assets have fallen in value and distributions have slowed – has meant some LPs have had to significantly reduce private equity commitments.
TowerBrook now has around $5 billion under management and invests primarily in Europe and North America. Its portfolio includes companies such as fashion brand Jimmy Choo and sportswear manufacturer Odlo.
Towerbrook spun out from Soros Fund Management in 2004 and raised its first fund as an independent manager in 2006.