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Strategic Partners buys into Doughty Hanson tail-end funds

Doughty Hanson III is a 1998-vintage fund that still owns turbine manufacturer LM Wind Power.

Strategic Partners has purchased stakes in Doughty Hanson & Co funds III and IV from Barcelona-based BMB Investment Management, according to UK regulatory filings.

Doughty Hanson III is a 1998-vintage fund that closed on $2.66 billion, according to PEI’s Research and Analytics division.

Fund III’s only remaining investment is turbine manufacturer LM Wind Power, which it shares with Doughty Hanson V, a 2007-vintage fund.

LM Wind Power’s turbine business has suffered from the European financial crisis. In 2012, the company said it expected to continue to face slow demand and price pressures. At the time its profits had slipped 41 percent, causing it to cut 3 percent of its staff.

Doughty Hanson has exited the rest of Fund III’s investments. Last year, it reportedly sold Spanish bus and bus station operator Avanza Group SA and in 2012 it sold canmaker Impress Cooperative for a reported €1.7 billion, generating a €688 million return for the firm.

Fund III was generating a net internal rate of return of 13.4 percent as of 30 June, according to documents from the Oregon Public Employees Retirement Fund, a LP in the fund.

Doughty Hanson IV closed on €1.5 billion, missing its €3 billion target, in 2004. LPs include Liberty Mutual Insurance Company, the Michigan Department of Treasury and Swiss private bank Pictet, according to PEI data.

Fund IV has four remaining investments: rug and carpet maker Balta, Irish TV channel TV3 and manufacturing companies Zobele and KP1, according to the firm’s website.

Doughty Hanson declined to comment.

It is unclear why BMB divested the Doughty Hanson funds and a spokesperson from the firm did not return a request for comment by press time.

Other LPs that have sold the pair of funds include HBOS, the banking and insurance subsidiary of Lloyds Banking Group. HBOS sold its stakes to Coller Capital in mid-2012, according to UK regulatory filings.

Strategic Partners purchased the fund stakes using its latest secondaries fund which closed last month on $4.4 billion. The firm declined to comment.