Pantheon hands off Cinven stakes

The Fourth Cinven Fund raised €6.58bn in 2006 and exited allergy testing company Phadia for $3.52bn in 2011.

Pantheon has sold its positions in two Cinven funds to Strategic Partners, according to UK regulatory documents. The funds are The Third Cinven Fund and The Fourth Cinven Fund.

The Third Cinven Fund raised €4.3 billion in 2001, according to PEI’s Research and Analytics division. Pantheon initially acquired part of its position when it bought stakes from The University of Notre Dame in 2010 and Northwestern University in 2009, UK regulatory filings disclosed.

Other limited partners in the fund include the Alaska Retirement Management Board and AlpInvest Partners.

In 2003 Cinven acquired Fitness First in a £404 million ($633 million; €515 million) take-private and sold the company to BC Partners for £835 million in 2005, according to media reports. The sale generated a 3.4x return.

The fund has realised several other investments including French cable operator Numericable, which the firm listed on the NYSE Euronext in November 2013. Cinven sold its entire stake in April of this year, giving the firm a 4.7x return on the investment.

Fund III was generating a 34 percent net internal rate of return as of 31 March 2011, according to documents from The Pennsylvania Public School Employees Retirement Board (PSERS).

The Fourth Cinven Fund closed on €6.5 billion in 2006, according to PEI data. In 2012 Pantheon purchased a stake in the fund from Los Angeles-based J Paul Getty Trust and in 2009 it acquired a stake from Northwestern University, UK regulatory filings revealed.

More than 90 percent of LPs in the fund were existing investors from Fund III, according to a previous statement from the firm.

LPs in the fund pay a 20 percent carry fee and 8 percent preferred return, documents from the Los Angeles Fire and Police Pensions disclose. The fund also included a €65 million general partner commitment in addition to the  €6.5 billion raised from external investors.

Fund IV fully exited allergy-testing company Phadia for $3.52 billion in 2011, after initially acquiring the Swedish company in 2006, according to media reports. The sale generated a 3.4x return.

The sale of Dutch cable operator Ziggo also generated a 2.8x return for Cinven. The firm, along with Warburg Pincus listed the company on the NYSE Euronext in 2012, according to its website.

As of 31 March 2011, Fund IV was generating a 7 percent internal rate of return, according to PSERS.

Cinven declined to comment.

Strategic Partners acquired the fund stakes using its $4.4 billion Fund VI, which closed in October. Strategic Partners was an existing investor in the Third Cinven Fund, having bought into the fund through a “very large” portfolio of tail-end fund stakes from Bank of America earlier this year.

The firm’s deal with Pantheon comes months after fund of funds manager Pomona Capital bought LP interests in the same two Cinven funds from the New Mexico State Investment Council. The two interests were sold with two Clayton Dubilier & Rice fund stakes for more than $130 million.

Both Pantheon and Strategic Partners declined to comment.