Advent International Raises $17.5 Billion for Global Buyout Fund

(Bloomberg) -- Advent International has raised $17.5 billion for its largest fund yet, exceeding its target by $1.5 billion as return-hungry investors plow cash into private equity.

The firm closed Advent International GPE IX LP at its hard cap -- the maximum size allowed -- after fundraising for six months, according to a statement Thursday. It raised $13 billion in 2016 for its predecessor fund.

Advent, with headquarters in Boston and London, is the latest top-tier buyout firm to benefit from booming investor demand for alternative asset funds. Blackstone Group LP has set a hard cap of $25 billion for its latest flagship fund, people familiar with the matter said last month. That would be the industry’s largest ever if it hits that number. Other firms with multibillion-dollar funds in the market include Warburg Pincus and Brookfield Asset Management Inc.

“On the heels of the last downturn, the success of private equity drove the appetite of investors as it became the highest-performing asset class,” Advent Managing Partner David Mussafer said in an interview.

The new fund will continue the strategy of its predecessors, focusing on leveraged buyouts, corporate carve-outs and growth equity investments, primarily in Europe and North America, according to the statement. It will also selectively pursue deals in Asia and Latin America.

"We are seeing great deal flow in carve-outs in particular," said Advent Managing Partner James Brocklebank. "We continue to see this as a new phenomenon in Europe and it’s taking hold."

There are also opportunities for taking private midsize companies with thinly traded stock, he said. Those types of situations can be less competitive than sales of private companies because the firm can have one-on-one talks with management, he said. That makes it more difficult for counter-bidders to emerge.

Advent agreed to buy a plastic business in March from Evonik Industries AG for about $3.4 billion. The firm also expressed interest in buying Cerved Group SpA but decided not to proceed after a leak of the deal drove up the Italian credit manager’s stock price, according to a statement in March.

Payments Deals

Advent has been particularly successful in recent years in payments, an industry that’s been rapidly consolidating as consumers shy away from using cash. Earlier this year, it took public Nexi SpA, an Italian payments company it had acquired in 2015 with Bain Capital and other co-investors.

The firm has deployed about $3.5 billion in the payments industry, with investments in companies including Nets A/S and Worldpay Inc., according to a presentation the firm gave in March to the New Mexico State Investment Council, which committed $100 million to the new fund in its first investment with Advent.

Advent’s last four global private equity funds have produced a net internal rate of return of 23%, well above the 11% return investors would have received putting their money in the S&P 500 Index over the same time period, according to that presentation.

Founded in 1984, Advent has invested $44 billion in more than 345 private equity deals, according to the statement.

To contact the reporters on this story: Sarah Syed in London at ssyed35@bloomberg.net;Jason Kelly in New York at jkelly14@bloomberg.net

To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Matthew Monks

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