Advent International closed its seventh global buyout fund with €8.5 billion ($10.8 billion), an achievement in what has been a challenging time for private equity firms to raise funds following the financial downturn in 2008, sister magazine Buyouts reported earlier today.
Advent launched the fundraise in March, though it had begun pre-marketing in late 2011, Managing Partner David Mussafer told Buyouts. The firm ended up turning away capital: Investors in the final close had to scale back their commitments by 50 percent or more, according to the firm. Nonetheless, Advent experienced different market dynamics from the last time it raised a fund.
“Investors were extremely thorough, so the diligence experience we went through on a global scale was by far the most extensive we’ve ever been through,” said Mussafer, who added that “the depth of the questions they want to see…is the most significant that we’ve ever faced.”
More than 80 percent of commitments to the fund, Advent International GPE VII LP, came from prior limited partners, executives told Buyouts. They include the California Public Employees’ Retirement System, which committed $200 million; the Minnesota Board of Investment, which committed $200 million; and the Pennsylvania State Employees Retirement System, which committed $50 million. The firm also bolstered its investor base with undisclosed commitments from a number of sovereign wealth funds, as well as Middle Eastern and Asian investors, Bob Brown, managing director and global head of the firm’s limited partner services group, told Buyouts. He declined to name any of the investors, but the firm disclosed that 50 percent of the fund’s investors are from North America; 27 percent Europe; 17 percent Asia-Pacific region; and 7 percent Middle East, South America and South Africa.
“Part of my joining and the growth in the team have been directly related to the fact that investors are requiring more,” Brown said. “More off-cycle updates, more rigorous reporting, etc.”
For the rest of this story, subscribers can head over to sister magazine Buyouts.
Senior Editor Gregory Roth contributed to this report.
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