BC eyes Asia and Middle East for €6bn fund

The London headquartered buyout firm is likely to target almost €6bn for a fundraising this year – a similar size to its 2005 fund.

BC Partners will look to raise almost €6 billion for its ninth fund, with marketing likely to begin in the “latter part of the year”, said a source close to the firm.

The firm will look to tap new investors in the Middle East and Asia, said the source. Over half of the capital in BC’s current fund, BC European Capital VIII, comes from North American investors, such as the California State Teachers' Retirement System and Canada Pension Plan Investment Board. European institutions  account for around a third of the LP base, with just 10 percent coming from Asia, the Middle East and the rest of the world.

The current fund, which closed on €5.8 billion in May 2005 is approaching the end of its investment period and following a flurry of investment activity from the firm in the last year – it has deployed €1.3 billion since the collapse of Lehman Brothers in September 2008 – is around 75 percent invested.

BC’s return to the fundraising market will be keenly watched by other large buyout funds, many of which have delayed their fundraising plans due to slow investment levels and poor fundraising conditions.

The firm has made a number of significant investments in the last 12 months, including its first two US deals: the $350 million injection into New York-listed office supplies business Office Depot and the secondary buyout of secondary education provider ATI Enterprises.

The fundraising effort will likely be helped by the successful exit of Unitymedia, a German cable television provider, which generated an IRR of 40 percent for the firm.

The firm recently, however, lost control of its investment in UK estate agent Foxtons to its two lenders. BC injected just under £50 million (€57 million; $82 million) of new equity into the business as part of a restructuring that saw the private equity firm become a minority shareholder.