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Lexington and Hamilton Lane buy Bridgepoint stakes from CPPIB – update

Bridgepoint, the PE firm whose holdings include sandwich chain Pret a Manger, offered to buy back stakes in prior funds when it couldn't allocate CPPIB a large position in Fund V.

Updated to show Bridgepoint’s Fund V closed on €4bn, beating a €3.5bn target, and that CPPIB’s co-investment with Bridgepoint is in sports management company Dorna.

Lexington Partners and Hamilton Lane have bought partial stakes in three Bridgepoint buyout funds from the Canada Pension Plan Investment Board (CPPIB) after London-based Bridgepoint offered to buy back the stakes from the pension.

Bridgepoint had offered to purchase the stakes when CPPIB was unable to re-up in its latest fund, Bridgepoint Europe V, due to limited places for large limited partners like CPPIB, Secondaries Investor has learned.

“The process took place after the fundraising of Bridgepoint Europe V, which closed ahead of target,” said a spokesman for Bridgepoint, who declined to give further details. Fund V closed in March on €4 billion after a year of fundraising, beating its €3.5 billion target.

The deal that was ultimately agreed was arranged by Lexington Partners, with Lexington, Hamilton Lane and Bridgepoint all purchasing parts of CPPIB’s stakes in Bridgepoint Europe II C, Bridgepoint Europe III C and Bridgepoint Europe IV B.

Bridgepoint is said to have purchased its portions of the interests at par to a recent net asset value (NAV); it purchased 5.05 percent of each of the three fund interests back from CPPIB, according to a UK regulatory filing.

Bridgepoint Europe IV closed above target at €4.84 billion in 2008; Bridgepoint Europe III is a 2005-vintage fund that closed on €2.5 billion; and Bridgepoint Europe II is a €2.03 billion fund from 2002.

Lexington, which arranged the deal, bought the stakes through its Lexington Private Equity 18 vehicle and subsequently sold some portions of the interests to Hamilton Lane through three vehicles including Hamilton Lane Secondary Fund III, HL International Investors and HL Secondary Opportunities Series, according to the filing.

Secondaries Investor understands the deal was conducted over a few months and was completed in July.

CPPIB remains an investor in Bridgepoint Europe IV through a co-investment deal in Dorna, a sports management, marketing and media company that holds the rights to the FIM Road Racing World Championship Grand Prix.

CPPIB, Lexington and Hamilton Lane were not immediately available for comment.