LONDON (Reuters) – Candover (CDI.L) has called a halt to all new deals for its flagship fund, leaving the private equity firm to gradually sell off investments and return cash to disgruntled investors.
Candover said on Friday it had reached agreement with investors to stop spending money from its 2008 fund, meaning it will have no further cash to make investments.
The woes of the embattled buyout house, once seen as one of the leading lights in the European private equity industry, demonstrate how the industry’s fortune turned in the downturn.
As deals faltered and returns from investments dried up, Candover was unable to meet its 1 billion euro ($1.43 billion) commitment to its 2008 buyout fund and its default allowed other cash-strapped investors off the hook with their pledges.
Candover said all investors had agreed to terminate the investment period of its 2008 fund early, scaling back investor commitments to just 100 million euros to support the fund’s only investment, oil and gas services business Expro.
“This agreement draws to a close a period of uncertainty for everyone involved,” said Matthew Fallon, chief executive of Candover Investments, the group’s listed parent company. “We can now move forward, with the immediate priorities being the maximisation of value from the existing portfolio,” he said.
Candover said all investors have waived claims against the firm as a result of its defaulting on its commitment, while the listed company would give up any performance fees resulting from Expro to other investors.
Despite the untimely end to the 2008 buyout fund, partners at Candover hope to raise new capital for deals, with options including a new fund or cash raised on a deal by deal basis, a source familiar with the situation said.
By Simon Meads
(Editing by Dan Lalor) ($1 = 0.6983 euro)