By Simon Clark
Doughty Hanson & Co., a pioneer of the European leveraged
buyout industry, said it would cease efforts to raise a new
private-equity fund and focus instead on selling its existing
assets. The firm may never raise another fund.
"We have reflected on several years of discussions with existing
investors and, while today's announcement is disappointing for
those investors that have committed to the current fundraising
efforts, it pre-empts further prolonged uncertainty," said Chief
Executive Stephen Marquardt in a statement.
"We will now enter into a period of review with our employees
and investors to explore the possibility of another fund in the
future," Mr. Marquardt said.
Doughty Hanson was founded in London by British bankers Nigel
Doughty and Richard Hanson, who started doing buyouts together in
1985 at Standard Chartered PLC. They raised a GBP167 million ($245
million) fund in 1990. Their last fund of EUR3 billion ($3.2
billion) was raised in 2007.
The firm struggled with some investments in the wake of the
financial crisis and grappled with establishing a clear succession
plan after Mr. Doughty died in 2012 at the age of 54. Mr. Marquardt
declined to comment further when contacted by telephone.
"Nigel Doughty passing away was a big blow for the firm," said
Maarten Vervoort, an executive at Amsterdam-based private equity
investor Alpinvest Partners.
The decision to scrap the fundraising was taken recently. In a
note dated March 2015 in the firm's last annual report, Mr. Hanson,
59, wrote that he planned to announce the new fund this year. "It
is a new fund, but with very familiar features: the same team and
the same investment strategy," he wrote. "That is why we're
delighted to have secured commitments from many of the investors in
Doughty Hanson's previous funds."
Doughty Hanson is the latest private-equity firm in the U.K. to
stumble as founders come under pressure to hand over control to a
new generation. Guy Hands, another pioneer of the European private
equity industry, said in February that, rather than raising a new
fund, he planned to use "committed capital of EUR1 billion" to buy
companies, more than half of which is his own money.
Write to Simon Clark at simon.clark@wsj.com
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