HgCapital has reached a final close on two of its funds at their respective hard caps, securing total commitments of £3.1bn (€3.7bn).
The firm’s main buyout fund, HgCapital 8, raised £2.5bn while its lower mid-market Mercury 2 vehicle closed at £575m.
The buyout fund reached a first close at £1.9bn in December and exceeds its predecessor’s total of £2bn.
According to the firm, both funds were more than three times oversubscribed versus the target.
The largest commitment to both funds came from the firm’s listed investment vehicle HgCapital Trust.
Last year, HgCapital completed ten new investments, seven realisations and three refinancings across the large buyout and Mercury funds.
This represented a total investment activity of circa £950m and returned around £1bn of investment proceeds to investors, according to the firm.
HgCapital Mercury 2
Mercury 2, which started raising in November 2016, closed in record time for an HgCapital fund after just three months on the road. It further exceeded its target of £450m.
The first Mercury fund closed in March 2013 at £380m. Its successor will continue to back buyouts of European TMT businesses with an enterprise value of up to £100m.
It made its first exit last summer from Relay Software, in a transaction which generated an IRR of around 40 per cent and a 2.1x investment multiple.
Mercury’s current portfolio of investments delivered aggregate revenue and Ebitda growth of 13 per cent and 41 per cent respectively during 2016.
The name for the fund derives from the firm’s origins. HgCapital started life as part of Mercury Asset Management, which was acquired by Merrill Lynch in 1997.
The Mercury Private Equity team span out as HgCapital in December 2000.
Proskauer provided legal advice and Rede Partners advised on the latest fundraisings.