HarbourVest Partners became a majority stakeholder in a new Portobello Capital fund worth more than €400 million, when it agreed to purchase stakes from existing investors, according to an executive at Portobello.
The Boston-based fund of funds manager was an existing investor in Portobello Capital II, a €331 million buyout fund which held seven remaining assets, when it agreed to invest in a new fund structure with new terms, Secondaries Investor previously reported. As part of the deal, the assets were transferred to a newly-created fund, Portobello Capital Secondary Fund I, with Portobello remaining as manager, and some existing limited partners including HarbourVest becoming investors in the new five-year fund.
“We were considering many alternatives,” Luis Peñarrocha, founding partner at Portobello, told Secondaries Investor. “We tested the margins for the companies to be sold one by one, and then tested a couple of secondary investors, and we chose the best offer,” he said.
The firm used international advisors and negotiated with a number of parties before choosing HarbourVest, Peñarrocha said. HarbourVest proposed a very competitive offer and the firm decided to go with HarbourVest because they had invested in the firm’s second fund, he said. The other limited partners in the new fund are all international institutional investors.
Peñarrocha declined to comment on details of the new fund or on how many existing investors from Fund II took HarbourVest’s offer to cash out.
Madrid-based Portobello, which has a mandate to invest in companies headquartered in Spain, expects to find exits for the seven assets it holds in Portobello Capital Secondary Fund I within five years, Peñarrocha said.
The new fund will hold the seven companies from fund II, including food and beverage maker The Ice Cream Factory, insurance services firm Multiasistencia and Veinsur, the largest Volvo Trucks official dealer in Europe, according to Portobello’s website.
Portobello buys mostly controlling stakes in companies and invests between €10 million and €100 million. The firm had €700 million in assets under management as of March, according to its website.