Cinven Ltd., the British private equity firm that owns the Pizza Express restaurant chain, is in talks to raise 5 billion euros ($7 billion) for a leveraged buyout fund, three people with knowledge of the matter said.
Managing Partner Hugh Langmuir, a 20-year Cinven veteran, began briefing investors on the plans today after the firm spent 70 percent of the 6.5 billion-euro pool it raised in 2006, said the people, who declined to be identified because the decision is private. The firm initially sought 5 billion euros for its previous fund.
Cinven follows competitors BC Partners Ltd., Montagu Private Equity LLP and Sweden’s EQT Partners AB in returning to investors for money in Europe as LBO firms resume acquisitions as the credit crisis eases. BC Partners, one of the first European funds to start raising money since 2008, has amassed 4 billion euros so far out of the 6 billion euros it’s seeking for its latest fund, people with knowledge of the talks said on March 8.
Cinven was founded in 1977 by the Coal Pension Trustees Services Ltd. It has been an independent company since 1995 and has invested throughout Europe in companies including Amadeus IT Holding SA, the flight-reservation provider that went public last year, French women’s clothing retailer Camaieu and Avio, a maker of engines for airplanes and rockets.
The firm expects to announce a so-called first close of the new fund in the second half of the year before completing the fundraising in 2012, investors were told at the firm’s annual meeting in London today, according to the people. Cinven’s 2006 fund is posting a 40 percent gain on its investments, while the firms’ previous fund has returned about 27 percent a year after fees, they said.
Private equity firms raised $225 billion last year, the lowest since 2004 as investors became reluctant to commit money to new funds before reaping profits from previous investments, according to Preqin Ltd. They may raise more than $300 billion this year, the London-based firm research said.
Cinven is planning to extend the investment period of its current fund by a year starting in June, to invest another 1.3 billion euros from it, according to the people. The firm is also considering options including initial offerings for Avio and Dutch cable company Ziggo BV, one of the people said.
Private equity fund managers have led $74.8 billion of buyouts this year, twice the amount in the same period in 2010, data compiled by Bloomberg show.