DEALTALK-Investors pledge buyout firms billions for deals
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* Oaktree, Montagu, BC Partners planning first close-sources
* Cinven, EQT said to be readying new funds for launch
By Simon Meads
LONDON, Dec 20 (Reuters) - A group of major private equity firms have gathered billions of euros from investors ready for new deals, as they look to match or exceed previous funds raised in the buyouts boom before the crisis.
Others are warming up investors for new fundraisings in 2011, as they near the end of their current funds and look to gather fresh capital for deals, people familiar with the different situations said.
Distressed debt investor Oaktree Capital [OAKCP.UL] is on the brink of a first close -- the point after which it can start investing capital -- on its third European-focused fund, targeting up to 3 billion euros ($3.95 billion), two of the people said.
The company, which invests in both equity and debt stakes in companies as a route to control, will mark the close having raised under half the full target as it looks to access capital immediately for new deals, one of the people said.
"(A first close) is very much imminent," the person said.
Meanwhile, Montagu will mark its first close in January at up to 1.8 bln euros, having set a cap of 2.5 bln euros on its fourth buyout fund, two people said. [nLDE6821H8]
And BC Partners [BCPRT.UL] -- one of the most closely-watched big buyout funds -- is expected to hold a first close in February, having raised 2.5 billion to 3 billion euros towards its near-6 billion euro ninth buyout fund, one of those two and another person said. [nLDE64A27E]
Private equity firms raised money hand over fist in the buyouts boom as investors, attracted by the promise of stellar returns, pledged ever increasing amounts to the industry.
Over-stretched by those commitments and seeing little money back from portfolio company sales, investors are reining in new capital to buyout firms.
From a peak of more than $650 billion in 2008, capital flowing into the private equity industry has fallen to $230 billion in the last four quarters to end-September, according to data and consultancy firm Preqin.
Private equity firms typically start raising a new fund when they have invested about 75 percent of their current funds, but with the squeeze on capital, they are increasingly warming investors up well in advance of a formal launch.
Cinven [CINV.UL], which has spent about 70 percent of its 6.5 billion euro buyouts fund raised in 2006, has been talking to investors about raising its fifth fund, two people said.
The firm is targeting 5 billion euros to 6 billion euros and will flesh out plans at its annual meeting in March, they said.
Sweden's EQT is encouraging investors to look at data on previous funds' performance ahead of launching a new fundraising. The firm raised 4.25 billion euros in 2006 and is looking for a similar amount for its sixth fund, the first person said.
Apax, which has spent about 60 percent of its 11.2 billion euro fund, could also start raising new capital in 2011, although it has yet to approach investors, two people said. [ID:nSGE6BJ03C]
Any private equity firm can expect fundraising to take longer. The average time needed to raise a buyout fund has risen to 19 months from under 11 months in 2006, according to Preqin.
Firms can also expect discussions with investors on fees and fund structures.
BC Partners is considering changing the way its staff earn their bonuses and has offered some concessions on management fees for those investing in the first wave, people said.
Lion Capital, which was close to first close in September, will charge a management fee 1.75 percent on the first 1.5 billion euros it raises, dropping to 1.5 percent on any capital raised above that, a source said at the time. [nLDE68T14X]
The private equity firms mentioned declined to comment, or were unavailable to comment.
(Editing by David Cowell)
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