European Buyout Firm Hg Plans to Raise $4 Billion for Next Fund

European private equity firm Hg is planning to raise its biggest-ever pool of capital, as it gears up to seek about $4 billion for a new buyout fund, people with knowledge of the matter said.

The investment firm is making early preparations for the fund, known as Saturn 2, according to the people. It will target larger companies valued at more than 1 billion pounds ($1.3 billion) including debt, the people said, asking not to be identified because the information is private.

The amount Hg is targeting for the latest fund is a significant increase from the 1.5 billion pounds raised for its first Saturn fund in 2018. The firm focuses on investments in software and services businesses.

Investors’ hunt for yield is leading private equity firms to raise record amounts of cash. The industry, including real estate, debt and venture funds, is sitting on about $1.4 trillion of undeployed capital, according to data complied by Bloomberg.

Hg isn’t alone in looking to raise its biggest-ever fund. CVC Capital Partners is considering seeking more than 18 billion euros ($19.9 billion) for its next pool, Bloomberg News has reported. EQT Partners announced earlier this month it set a record target size of 14.75 billion euros for a new flagship fund.

No final decisions have been made, and the amount Hg plans to raise could change, the people said. A representative for Hg declined to comment.

Hg said in December it had acquired Personal & Informatik AG, a German provider of cloud-based HR software, from Permira in a deal valuing the company at 2 billion euros including debt. The purchase represented the fourth investment from the initial Saturn fund, according to a statement.

Source: Bloomberg

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