News & Analysis

JPMorgan buys into Doughty Hanson V

Doughty Hanson's €3bn Fund V generated a 40% IRR and 2x return multiple from its exit of Spanish hospitals group Quirón earlier this week.

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JPMorgan and a group of investors have acquired a stake in Doughty Hanson & Co. Fund V from Allstate Insurance Company and Allstate Life Insurance Company, according to a UK regulatory notice.

JPMorgan acquired the stake using capital from its JPMorgan Secondary Private Equity Investors II, which launched in 2012 and has collected $868.8 million, according to PEI’s Research and Analytics division.

The firm also deployed capital from its JPMorgan Global Private Equity Institutional Investors Fund V – a fund of funds and co-investment vehicle that collected $82 million last year – and its European Corporate Finance Institutional Investors Fund V, a $61.8 million vehicle with the same strategy. JPMorgan did not return a request for comment at press time.

Doughty Hanson Fund V closed on €3 billion in 2007. Limited partners in the fund include the San Francisco Employees’ Retirement System, Pantheon Ventures, the Abu Dhabi Investment Authority and the West Midlands Pension Fund. There have been relatively few secondary transactions in Fund V, according to a source familiar with the matter.

Fund V has exited four portfolio companies to date, including Spanish hospitals group Quiron, which the firm sold earlier this week. The sale generated a 2x return multiple and a 40 percent IRR, according to the source.  Fund V has four companies remaining in its portfolio, including oil and gas logistics service provider ASCO Group and fibre-network operator Eurofiber.

Doughty Hanson was co-founded by Richard Hanson and the late Nigel Doughty, who passed away unexpectedly in February 2012.  Richard Hanson has remained chairman and Stephen Marquardt is chief executive officer. The firm is currently fundraising for Doughty Hanson VI, which launched last year with a €2 billion target, according to PEI data. Doughty Hanson declined to comment.

The other investors that acquired the Doughty Hanson stake from Allstate include the Concordia Retirement Plan, the Co-op Retirement Plan Trust, the Lincoln National Life Insurance Company and Villanova Private Assets Fund, according to the UK filing.