Strategic Partners increases stake in Doughty Hanson fund

Blackstone’s Strategic Partners has acquired another stake in a tail-end Doughty Hanson fund, according to a UK regulatory filing.

Strategic Partners bought a stake in Doughty Hanson & Co III, a 1997-vintage $2.7 billion buyout fund, from DLJ Fund Investment Partners II through its Strategic Partners VI Acquisitions K fund, according to the filing. It is understood the original commitment to the fund was worth $8 million.

DLJ Fund Investment Partners II is owned by Connecticut-based Portfolio Advisors, which acquired the fund when DLJ spun out from Credit Suisse’s private equity business in 2013.

The transaction was completed on 30 June, according to the filing.

Last year, Strategic Partners bought a stake in Doughty Hanson III and IV from Barcelona-based BMB Investment Management, Secondaries Investor previously reported.

Fund III’s only remaining investment is turbine manufacturer LM Wind Power, the world’s largest independent supplier of rotor blades for wind turbines, according to its website. It shares the investment with Doughty Hanson V, a 2007-vintage fund. The fund was generating a net internal rate of return of 13 percent and a 1.8 x return as of 31 March, according to documents from the Oregon Public Employees Retirement Fund, an LP in the fund.

A spokesperson for Doughty Hanson in London confirmed the deal had taken place, adding the net IRR for the fund was 20 percent and the return on equity was 2.2 x as of 30 June.

Doughty Hanson III held portfolio companies including Dutch consumer metal packaging maker Impress and food manufacturer RHM, which it sold in 2006. The fund acquired sportswear maker Umbro in 1999 and floated the company on the London Stock Exchange in 2004, according to Doughty Hanson’s website.

Investment bank Donaldson, Lufkin & Jenrette (DLJ), which originally held the Doughty Hanson fund interest, was bought by Credit Suisse in 2002. In 2013, Credit Suisse spun off DLJ’s private equity business into at least two units, with Portfolio Advisors agreeing to become the new manager of one of the units. The unit contained the DLJ Investment Partners business and included interests in Doughty Hanson III.

In 2013, Blackstone purchased Credit Suisse’s secondary private fund of funds business, Strategic Partners, forming Blackstone Strategic Partners. The firm has $16 billion of committed capital and has acquired over 2,100 fund interests, according to Strategic Partners’ website.

Strategic Partners declined to comment on the deal and Portfolio Advisors couldn’t be reached.