Happy Wednesday. Here’s what we’ve got today…

• A look at Equistone’s decision to pause its seventh flagship raise

• Plus, Apollo to acquire Argo Infrastructure Partners

Equistone pauses fundraising:

Equistone Partners Europe has suspended fundraising for its seventh flagship fund after failing to reach its €2.5 billion target.

Citing sources familiar with the matter, Bloomberg reports that the firm has told investors it's in exploratory discussions around alternative fundraising structures, including possible sector-specific or geography-specific strategies. These options could launch either as separate sub-funds or be deployed through the flagship fund.

For now, the fundraising challenges have prompted an internal reorganization.

Equistone has halted new investment activity in German-speaking markets to focus on managing its existing 36-company portfolio. The firm has also shed headcount, dropping to around 50 professionals from a peak of 70.

The departures include investment professionals in the DACH region, as well as back-office consolidation.

Among those on the move is Head of Investor Relations Christiian Marriott, who left Equistone in December after more than 13 years with the firm. Investor elations director Michael Hachar also left, joining Peak Rock Capital in November.

European buyout fundraising mirrored global fundraising challenges with a 2022 and 2023 pullback, though a 2024 recovery has boosted spirits in the region.

Equistone had been in the market with its new fund since late 2022 — a dramatically more challenging raise than predecessor Fund VI, a €2.8 billion vehicle that hit its larger hard cap in 2018 after just four months.

Performance may have added another drag on top of the sluggish fundraising environment.

As of June 2024, Fund VI reported a net IRR of 17.9 percent and DPI of 0.8x, but the firm’s 2015 fifth fund reported net IRR and DPI of just 7.1 percent and 1.0x, respectively.

Equistone will continue to invest the money already raised for Fund VII and has been actively pursuing add-on acquisitions for existing portfolio companies. Last week, the firm's claims services platform QuestGates announced agreements to acquire motor industry claims business Brownsword and forensic accounting provider Toppings.

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Fintech

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Healthcare

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