March 12 (Bloomberg) -- Apax Partners Worldwide LLP Chief Executive Officer Martin Halusa plans to stop investing in startup companies to focus solely on leveraged buyouts after raising a record 10 billion-euro ($13 billion) takeover fund.

``Our next fund will be 100 percent buyouts,'' Halusa said last week after giving a presentation to the Washington State Investment Board in Olympia. ``Our venture results have been very volatile, and our focus is on the more stable end of the business.''

Halusa, who succeeded founder Ronald Cohen three years ago, is phasing out the mix of buyouts and venture-capital investments that Cohen and partner Alan Patricof developed in the 1990s. Halusa shut Apax's Silicon Valley office in California and resigned from the National Venture Capital Association, a U.S. trade group, to devote more time to LBOs. Apax aims to complete its latest fundraising in April.

``Cohen and Patricof started in the venture space when the industry was quite immature in Europe,'' said Jens Bisgaard- Frantzen, who helps oversee about 3 billion euros of investments in private equity funds as managing partner of Denmark's ATP Private Equity Partners. ``They've grown the appetite for doing large deals and have been successful in doing them.''

Cohen and Patricof worked together for more than 25 years, backing companies from Apple Computer Inc. and America Online Inc. to the U.K.'s PPL Therapeutics Plc, which cloned a sheep called Dolly. At the same time, the firm pursued takeovers of larger companies including U.K. yellow-pages publisher Yell Group Plc.

`More Buyouts'

Apax teamed up in 2005 with four buyout firms to acquire Danish phone company TDC A/S for $15.3 billion in what's still Europe's biggest LBO. In January, Apax sold Sweden's Moelnlycke Health Care AB to Sweden's billionaire Wallenberg family for 2.85 billion euros, earning more than 10 times its original investment.

The new fund is more than twice the size of the 4.3 billion- euro pool that Apax raised in 2005. That fund has given investors a 57 percent return, said Stephen Grabiner, an Apax partner.

Rival LBO firms including Washington-based Carlyle Group have separate venture-capital and buyout funds. Apax used the same fund to invest in both venture and buyout deals to reduce risks and maximize returns after its first European buyout fund, a 300 million-euro pool raised in 1989, struggled to return investors' cash.

``The firm has made it clear it wants to be a buyout firm,'' Cohen said in a March 1 interview in Frankfurt. ``It's not going to do straight venture investments.''

Patricof last year started Greycroft Partners LP, a venture fund to invest in media and entertainment companies.

London Rivals

As the size of LBOs has increased, more than a dozen dealmakers have left Apax. They include venture capitalists Michael Risman and Munich-based Peter Blumenwitz, who both focused on technology companies.

Halusa, 52, has added advisers including BP Plc Chief Executive Officer John Browne and E. Scott Mead, a former Goldman Sachs Group Inc. banker who worked on the world's biggest hostile deal, Vodafone Group Plc's takeover of Germany's Mannesmann AG.

Apax is trying to keep up with London firms led by Permira Advisers LLP that have gathered record funds for buyouts in the past 18 months. Permira raised 11.1 billion euros for the region's biggest LBO fund last year and Cinven Ltd. garnered 6.5 billion euros.

Apax plans to use the new fund to target as many as 25 companies, each worth between 1 billion euros and 2 billion euros. The firm is using a separate fund for buyouts in the U.S. after hiring John Megrue and Allan Karp from Stamford, Connecticut- based Saunders Karp & Megrue LP to run its takeover business in February 2005.

To contact the reporters on this story: Edward Evans in London at eevans3@bloomberg.net;

Last Updated: March 12, 2007 08:12 EDT