Abbott Capital has purchased a stake in HgCapital’s £958 million ($1.4 billion; €1.3 billion) Fund 5, UK regulatory filings disclosed.
The transaction comes weeks after Abbott told Secondaries Investor it planned to increase its secondaries investment pace.
Between 1993 and 2013, the fund of funds manager invested a total of $170 million in secondaries, but its current plan calls for between $50 million and $100 million of secondaries investments each year.
“Our goal is not to be Lexington or Coller, but to leverage off our primary portfolios by, for example, buying secondaries in our existing funds,” director Martha Cassidy had previously said.
Abbott declined to comment on the most recent transaction but according to UK filings, the firm funded the transaction with its $1 billion fund of funds Abbott Private Equity Fund VI.
HgCapital 5 is a 2006-vintage fund that received commitments from 50 institutional and private investors. The fund has sealed several exits, including lighting product maker SLV, which generated a 4x return on original cost and a 45 percent internal rate of return, and talent measurement company SHL, which generated a 3.1x return and 25 percent IRR, according to its website.
The fund also sold a majority of its stake in Nordic software business Visma to KKR in 2010. The fund initially paid £101 million for a stake in the company in 2006 and then re-invested in the company in April last year using its HgCapital 7. The total return on all capital invested in Visma between 2006 and 2014 generated an overall investment multiple of 5.2x original cost and a gross IRR of 34 percent for Fund 5 investors, according to a statement.
Fund 5 has three remaining investments: UK supply chain management company Achilles, oil and gas e-learning services provider Atlas and Swiss industrials company SFC Koenig, HgCapital’s website disclosed.
The fund was generating a net IRR of 14 percent as of January 2013, according to documents from the Pennsylvania Public School Employees’ Retirement System.
HgCapital declined to comment.
Abbott purchased the stake from NRAM Pension Scheme, formerly known as Northern Rock Asset Management. NRAM is now owned by holding company UK Asset Resolution (UKAR), which manages the national bank’s run-off elements. UKAR was formed to support NRAM after the global financial crisis in 2010. A spokesperson from the group was unavailable to comment by press time.