Vision Capital, the private equity house that buys portfolios of unwanted companies, has raised €680m (£599m) to take advantage of the difficulties facing large corporate groups, financial institutions and other private equity houses.
The fundraising – almost double the €350m it raised for its previous fund – is a notable success for Vision Capital in one of the toughest environments in the history of the private equity industry. It started raising the new fund in March 2008.
Vision Capital, which boasts Goldman Sachs as its biggest investor, has built itself a niche activity since its creation in 1997 by acquiring portfolios of non-core businesses from corporate groups, institutions and other private equity groups.
The company has its hands full with one of its most recent deals, the purchase of First Quench Retail, the UK’s biggest off-licence chain, which is preparing to close several hundred of its 1,500 Thresher, Wine Rack and The Local stores.
However, First Quench Retail has no debt and came with cash on its balance sheet when Vision Capital acquired it from Terra Firma, Guy Hands’s buy-out house, in a £250m deal that included the BrightHouse television retail business in 2007.
Julian Mash, founder and head of Vision Capital, said he expected asset prices to fall, so had not made a new investment since buying JDR, the maker of undersea cables, from Bridgepoint, the private equity group, in September 2007.
Previous investments included a collection of portfolio companies from Bridgepoint and the own-brand label businesses of Northern Foods.
Mr Mash said the turmoil in the global financial system was expected to generate opportunities to buy portfolios of non-core assets from financial institutions.
Vision Capital has the capacity to use parallel partnerships and sidecar vehicles to tackle bigger deals, so could end up investing almost double the amount of its latest fund.
Mr Mash said it was one of the few private equity groups recruiting staff.
More than 90 per cent of prior investors committed money to the new fund, including HarbourVest and CV Starr.