The National Pension Service (NPS) and the Korea Investment Corporation (KIC), two major South Korean investors, were confirmed to invest a combined €350 million ($371 million) in a €7 billion ($7.4 billion) buyout fund which British private equity firm BC Partners LLP has been raising since the second half of last year.
NPS and KIC committed €200 million and €150 million each to the fund, the 10th buyout fund for the London-based private equity house, which targets management buyouts of businesses in Europe and North America, according to investment banking sources on Jan. 9.
BC Partners kicked off the fundraising in five years after it raised €6.5 billion for its ninth fund in 2012, which also had attracted both NPS and KIC as limited partners (LPs).
Separately, in March 2015, sovereign wealth fund KIC teamed up with BC Partners to buy out PetSmart Inc., the biggest U.S. pet supplies and service retailer, and invested $100 million in the acquisition. A consortium including BC Partners, Singapore’s GIC and KIC took over the Phoenix-based company for $8.7 billion, which was the largest leveraged buyout in the U.S. for 2014 when the investment was announced. According to Forbes and other media reports, the investment has produced substantial returns, including $800 million dividend payouts to the consortium in January 2016.
LPs of a private equity firm’s fund are provided with co-investment opportunities and allowed to share profits of buyout transactions, without paying management fees to the fund.
BC Partners was set up in 1986 as Baring Capital Investors to provide Barings Bank with advisory services for management buyouts. Following the collapse of the British bank in 1995, principals of Baring Capital spun off the advisory firm into BC Partners. It has grown into a leading private equity house in Europe, along with CVC Capital Partners and Permira.
By Chang Jae Yoo
<Edited by Yeonhee Kim>