Exponent suspends tender offer on £1bn fund – exclusive

The UK-focused buyout firm, which is seeking £1bn for its latest fund, has been exploring a GP-led process on its 2015-vintage vehicle.

Exponent Private Equity, one of the best-known UK-focused buyout firms, has temporarily halted a secondaries process on its 2015-vintage fund, Secondaries Investor has learned.

The London-headquartered mid-market firm has been working with advisor Park Hill on an LP tender offer on its £1 billion ($1.3 billion; €1.2 billion) Exponent Private Equity Partners III fund, according to three sources familiar with the matter.

Market volatility caused by uncertainty around the UK’s future relationship with the EU contributed to the pause on the proceedings, Secondaries Investor understands.

Fund III closed above its £800 million target in 2015 after around a year in market, according to PEI data. Investors include Aberdeen Private Equity, PGGM and San Antonio Fire and Police Pension Fund.

The fund contains 11 assets, according to Exponent’s website. These include sports newspaper Racing Post, online photo printing company PhotoBox and sightseeing tour company Big Bus Tours. The vehicle has not yet made an exit, according to the firm’s website.

Exponent came to market with its latest fund, Exponent Private Equity Partners IV, in June 2017, according to PEI data. Secondaries Investor understands that it is targeting £1 billion. The proposed process on Fund III does not involve a stapled commitment to Fund IV, according to a source familiar with the matter.

Fund IV has made one investment so far in media business Dennis Publishing.

On a secondaries panel at sister publication Private Equity International‘s Women in Private Equity forum in November, participants said that buyers should be wary of currency volatility caused by Brexit when looking at UK assets.

Where a pound-denominated asset is part of a portfolio’s net asset value, currency volatility will impact the way due diligence is conducted, said Evelyn Zhang, a vice-president at Partners Group.

Exponent declined to comment. Park Hill did not respond to a request for comment.