Raising a first-time fund is never an easy task, but limited partners’ insatiable appetite for private equity coupled with a desire to get in there early with potential future winners has made this year a good time for established teams with a strong track record to try their luck.
As Private Equity International looks back at 2017, here’s a compilation of some of the top debut fundraises by emerging managers.
Spinning out of Australia’s giant: Adamantem Capital
Founded in July 2016 by Anthony Kerwick and Rob Koczkar, former managing directors at Pacific Equity Partners, Adamantem Capital is expecting to hold a final close on its debut fund on around A$600 million ($456 million: €385 million) by year-end to invest in mid-market opportunities in Australia and New Zealand. The founders were hit with a lawsuit by PEP in April alleging the Adamantem team might have used confidential information such as the financial performance of PEP’s funds and portfolio companies in its fundraising materials, but PEP lost its case in late September.
Where Europe and Asia meet: AGIC Capital
Founded in 2015 by ex-Deutsche Bank executive chairman Henry Cai, Asia Germany Industrial Promotion Capital (AGIC) targets investments in European small- and mid-cap companies specialising in intelligent manufacturing, high-end equipment, advanced materials, medical technologies and environmental protection technologies looking to expand their businesses into China. The firm closed its debut fund on its $1 billion target, with China Investment Corporation an anchor investor.
Going long (Europe version): Core Equity Holdings
The Brussels-based firm closed on $1 billion for Core Equity Holdings I, a 15-year life structure that aims to invests between €200 million and €500 million of equity in three to five deals. The four main partners, who together have more than five decades of combined experience in private equity – most of it at Bain Capital, have collected capital from North American and European endowments, foundations and large family offices.
Going long (US version): Cove Hill Partners
Bain Capital veteran Andrew Balson raised more than $1 billion this year in a few months for his new long-term private equity fund, Cove Hill Partners Fund I, which has a 15-year life span. Boston-based Cove Hill Partners, which Balson founded after working for 17 years at Bain Capital, collected money mostly from family offices, university endowments and foundations to make five to eight investments in the consumer and technology sectors in North America.
The Apollo of the lower mid-market: Gamut Capital Management
Former Apollo Global Management senior partners Stan Parker and Jordan Zaken launched mid-market firm Gamut Capital Management in 2015 and held a final close on their debut fund Gamut Investment Fund I on $1 billion, ahead of its $750 million target, at the beginning of 2017. Their aim is to replicate Apollo’s strategy of investing in buyouts, carve-outs and distressed-for-control investments in the lower mid-market.
Ex-Deutsche secondaries veterans: Glendower Capital
The secondaries team led by Carlo Pirzio-Biroli, Charles Smith, Adam Graev, Chi Cheung and Deirdre Davies, spun out of Deutsche Bank in the summer and will continue to advise on existing assets. The firm also planned to pre-market Glendower Secondary Opportunities Fund IV in the autumn, seeking between $1.5 billion and $2 billion, indicating it will be in full fundraising mode in 2018. Meanwhile, it has already closed a couple of deals, purchasing two stakes in Duke Street Capital’s sixth fund from Kuwait Investment Authority.
Zeroing in on Australia’s mid-market: Odyssey Private Equity
Former Quadrant Private Equity co-founder George Penklis teamed up with three former CHAMP Ventures executives – Gareth Banks, Jonathan Kelly and Paul Readdy – to set up Odyssey Private Equity in 2016. The firm raised A$275 million ($211 million: €198 million) for its debut fund, which will invest A$15 million-A$40 million in local mid-sized companies with enterprise values of up to A$100 million across a broad range of industries in Australia and New Zealand.
Operations-heavy Carlyle spin-out: Stellex Capital Management
The mid-market private equity firm launched by two former Carlyle executives held a final close on its first fund in the summer after nearly two years of fundraising, raising $870 million, ahead of its $750 million target. The Teachers’ Retirement System of Texas was an early backer, committing $50 million in November 2015 to the fund raised by founding partners Ray Whiteman and Michael Stewart.
Following Nordic mega-trends: Summa Equity
Set up in 2016 by five partners – Reynir Indahl and Johannes Lien, formerly at Scandinavian private equity house Altor, Tommi Unkuri and Jenny Keisu, formerly at Nordic Capital, and Christian Melby, formerly at Norwegian firm Norvestor Equity – Nordic lower mid-market firm Summa Equity smashed through its initial SKr3.3 billion ($372 million; €349 million) target to close its debut fund on SKr4.3 billion. The “mega-trend driven” firm follows four investment themes: resource scarcity, energy efficiency, changing demographics and tech-enabled businesses.
Targeting UK businesses: Tenzing Private Equity
Founded in January 2015 by Guy Gillon and Rob Jones, who both have experience investing with special situations investment firms, and Christian Hamilton, a former partner at UK mid-market firm Inflexion Private Equity, UK lower mid-market firm Tenzing closed its debut fund on its £200 million ($269 million; €227 million) hard-cap after just three months in market. The fund is targeting buyout investments in UK businesses with enterprise values of between £10 million and £50 million with high organic growth prospects.
– Isobel Markham and Marine Cole contributed to this report.