The firm started marketing the fund – which is targeting £2 billion, with a £2.5 billion upper limit – in September, according to people familiar with the matter.
It told investors on December 16 that it had held the first close and that it is due to close the fund on £2.5 billion in early February.
The vehicle, which will back northern European businesses in the technology, media, communications, services and industrials sectors, is fully allocated, the person said. The fund will remain open for a few more weeks to give investors a chance to commit capital earmarked for 2017.
HgCapital will put in a general partner commitment of more than 2% of the fund size, the people said.
HgCapital is also raising its next Mercury fund, which will make smaller investments in the telecoms, media and technology space. That fund will hold a first and final close in early February, the person said. The firm has not decided yet what the upper limit will be for that vehicle, but it is expected to raise more than £500 million.
HgCapital received capital from new and existing and investors, one of the people said. The Commonwealth of Pennsylvania Public School Employees’ Retirement System said in an investor note on November 4 that HgCapital had delivered a 2.5x gross return and a 37% gross internal rate of return on 24 realised or substantially realised investments in the firm’s core sectors, while delivering a 2.2x gross return and a 35% gross IRR on 105 realised or substantially realised investments.
London-based placement agent Rede Partners advised the firm on the fundraising for both vehicles, the person said.