Kevin Dowd December 15, 2016
It’s been a big past couple of days for private equity firms with names that start with the letters “HG.”
On the west coast of the US, Palo Alto-based investor HGGC has announced a $1.84 billion final close on its third flagship buyout fund, blowing past an original $1.5 billion target and topping the $1.75 billion hard cap. HGGC—which was co-founded by NFL legend Steve Young—claims to have raised the capital in fewer than 100 days. Evercore was the firm’s placement agent and Kirkland & Ellis its legal advisor.
The new vehicle is a rapid turnaround for HGGC: The firm closed its second fund on $1.3 billion fewer than two years ago. Before that, it had been six years since HGGC finished fundraising for its $1.1 billion debut. Both vehicles ranked in the top quartile of their respective benchmarks, according to the PitchBook Platform, with HGGC Fund II registering a 22.1% IRR as of 2Q and the firm’s debut vehicle posting a 17.3% IRR as of 1Q.
Across the pond in London, meanwhile, HgCapital is planning for a massive fundraising of its own. The firm will target £2.5 billion for its most recent flagship buyout fund, according to an SEC filing, a figure that would be a bit of an increase from HgCapital 7, which closed on about £2 billion in 2013. That fund has been just as impressive as both recent HGGC vehicles, with an IRR of 23.5% as of 3Q that ranks in the top quartile of its benchmark.
The Europe-focused investor has maintained a furious pace in 2016, completing 26 investments so far, a high for the decade. HgCapital was founded in 2000 as a spinout of Mercury Asset Management, which had previously been acquired by Merrill Lynch.