European buy-out firm Doughty Hanson closes fund below €2bn target on €1.6bn

Institutional investors had committed €1.5bn and an additional €87m was committed by employees of the firm.

Nigel Doughty said in a statement that because the fund's first four investments were performing very well 'existing investors asked us not to be diluted further and accordingly we agreed to their request to cap this fund.'

Investors include Partners Group, Pantheon Ventures, HarbourVest Partners, JP Morgan Asset Management, the University of Texas Investment Management Company, Morley Fund Management and Verizon Investment Management. The largest contribution came from European investors, followed by US and then Asian and Middle East investors.

Doughty Hanson will stick to the investment strategy of its previous funds. The focus is on middle-market to large-sized businesses in Europe with an enterprise value above €250m.

The fundraising suffered from difficult market conditions, having launched in 2002 when institutions were still suffering from the precipitous fall in financial markets that began in 2001. Some investors were also concerned about stability among senior members of the Doughty team.

Throughout the fundraising, however, the firm was able to realise some significant investments from previous funds to reinforce its credentials as one of the region's strongest performers. Doughty Hanson & Co Fund III, which began investing in 1998, has now returned $2.15bn to investors, representing about 100 per cent of drawn commitments, at a realised multiple of 2.2 times invested capital, according to the firm.

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