Advent International Closes Mammoth European Fund

by Carla Johnson, Investors Offshore, London

11 January 2002

In late December Advent International closed its biggest private equity fund to date, Global Private Equity IV fund, which with $1.9bn will invest in late-stage growth companies and LBOs.

Although Advent is a US firm, it has 45 partners in 14 countries, and remains a hybrid venture capital-leveraged buyout shop, with investment funds target everything from early-stage biotech and information technology to late-stage growth investments and LBOs.

In recent times it has concentrated on the US and Western Europe, while downplaying Asia. It took a highly cautious view of the TMT phenomenon in 2000, but concentrated on realising high multiples on existing high tech investments such as Dollar Express, a US discount retail chain, UK-based TDL Ltd., publisher of the Thomson phone directories, and Elior, a French caterer.

Advent says its return during the '90s on European investments soared to roughly 40% annually. Europe has proved a more hospitable theater than the US for LBO investors, so Advent has earmarked $1.3 billion, or about 70%, of its new GPE fund to invest in England and the Continent.

Advent says it will stick to the cautious investment habits it refined during the 1990s, including a concentration on those industries it knows best, including retail, specialty chemicals, media and business services. It will go light on leverage, not wagering overmuch on businesses with negative cash flows, and stay diversified.

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