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BC Partners’ latest buyout vehicle tops the list of the UK’s largest private equity fund closes this year as the fundraising environment becomes more challenging. 

Tougher market conditions, including rising interest rates, inflation and a potential recession, have slowed fundraising activity for UK PE vehicles, but some managers are still managing to pull in substantial amounts of cash. A total of six PE firms closed vehicles in excess of $1 billion this year, according to PitchBook data. 

   
BC Partners raised the largest with its $7.8 billion European Capital XI Fund in February—currently 2022’s only UK mega-fund, defined as a vehicle of $5 billion or more. The fund was more than double its nearest competitor, Inflexion Private Equity Partners, whose Buyout Fund VI closed on $3.6 billion in March.

The $1 billion-plus fund closes are dominated by buyout strategies, with only the third-place Generation Investment Management’s Sustainable Solutions Fund IV pursuing a growth/expansion plan. This fund closed on $1.7 billion May 18.

As the majority of PE firms are on the lookout for buyout targets, market conditions could result in a greater concentration of those with dry powder searching for a limited number of quality companies. With higher interest rates looking like the new normal, employing leverage might not be as appealing as it once was for firms looking to secure a target.  


Featured image via Aliaksey Dabralinski/Shutterstock

This article originally appeared on PitchBook News