HgCapital Raises £3.1B For Two Oversubscribed Technology Funds

Feb 17 2017 | 12:29am ET

European private equity company HgCapital has raised a total of £3.1 billion in capital commitments for two funds that will focus on investments in European software and technology firms.

The two funds, named HgCapital 8 and HgCapital Mercury 2, were closed on February 15, according to a statement, and raised £2.5 billion and £575 million, respectively. The funds were more than three times oversubscribed and each hit their hard caps, the company said, with HgCapital 8 in the market for just five months following launch last September.

HgCapital invests in industry leading businesses, with mission critical products serving loyal customers. It is currently partnered in 30 such investments across the larger buyout and Mercury funds, while the recent fundraising progress follows significant activity in 2016 during which HgCapital completed 10 new investments, 7 realizations and 3 refinancings - in total representing investment activity of around £950 million and returning approximately £1 billion of investment proceeds to investors.

HgCapital Mercury forms part of HgCapital’s sweet-spot technology investment focus, the company said, and has returned more than £2 billion to clients at an overall realized investment multiple of 2.5x and a 36% gross IRR across 14 investments over 16 years and zero capital losses.  

International law firm Proskauer provided legal advice and Rede Partners advised on the fundraising, the company said.

HgCapital began life as Mercury Private Equity, the private equity arm of Mercury Asset Management Plc, which was acquired by Merrill Lynch in 1997 and became an independent partnership in December 2000. Based in London and Munich, HgCapital manages approximately £8 billion for some of the world’s leading institutional and private investors, and is a UN PRI signatory. 

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