Hellman Friedman closes $8.4bn fund

Hellman & Friedman has closed Hellman & Friedman Capital Partners VI on $8.4 billion (€6.2 billion). The closing of HFCP VI, the firm’s sixth fund, brings Hellman & Friedman’s total capital raised and managed to $16 billion since its 1987 foundation.

The recently closed fund was invested in by many of the firm’s “longstanding limited partners”, such as the California Public Employees’ Retirement System, noted Warren Hellman, chairman of Hellman & Friedman, in a statement.

HFCP VI will employ the same investment strategy as Hellman & Friedman’s previous five funds, making investments of $250 million to $1 billion primarily in the US and European markets.

“We have already entered into HFCP VI’s first investment, our pending acquisition of Kronos, which is representative of the type and size of transaction we intend to do going forward,” said Hellman & Friedman chief executive, Brian Powers, in a statement.

The $1.8 billion acquisition of human capital management firm Kronos was also invested in by San Diego-based JMI capital.

Recently, the two private equity firms netted $2 billion from the sale of Hellman & Friedman portfolio company DoubleClick to internet giant Google. Hellman & Friedman and JMI took the digital marketing firm private for $1.1 billion in 2003.

HFCP VI’s second investment was announced Tuesday: an all-cash $1.7 billion acquisition of St. Petersburg, Florida-based Catalina Marketing Corporation. The transaction includes assumption of $136 million in debt. Debt financing is being provided by Bear Stearns and Morgan Stanley.

The deal is $0.40 per share higher than the 8 March deal to which Catalina Marketing previously agreed with ValueAct Capital. Catalina Marketing has subsequently terminated its agreement with ValueAct and paid an $8.44 million break-up fee.

Under terms of the agreement with Hellman & Friedman, the company would have to pay a $50.6 million break-up fee should it accept another bid prior to shareholder approval of the transaction. The deal is also subject to regulatory approvals and customary closing conditions; it is expected to close in the third quarter of 2007.

Hellman & Friedman has offices in San Francisco, New York and London. It invests in sectors including financial services, professional services, media, information services and power and energy.