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TheStreet Open House

The Deal: GMT Communications Seeks Money For Tech

NEW YORK ( TheStreet) --London private equity firm GMT Communications Partners is celebrating 20 years of focused investment in telecommunications, media and technology this summer by raising a new fund.

The firm has set a target of about €350 million ($463 million) for its fourth fund, but has not fixed a firm deadline for reaching that goal.

"The critical thing is to get our existing investors ready to go. Once you have had the first close there's a clearer timetable on the final closing," said Tim Green, a managing partner.

Those existing investors, in particular, Green and his team are in touch with themselves. But for a wider audience, they have brought in Greenhill & Co. (GHL) as the placement agent. That's especially needed to reach investors who might previously have had their eyes on more generalist funds.

As GMT partner Natalie Tydeman explained, "In the past there was not so much appetite (in Europe) for sector funds, but people who seven years ago would not have considered investing in one are developing specific sector strategies."

By the end of the process, Green envisages about 40% of GMT's fourth fund to be backed by U.S. investors, slightly more by European investors, with the remainder coming from elsewhere.

GMT, which earlier this year teamed up with New York peer Veronis Suhler Stevenson to provide growth capital for Dutch cloud-infrastructure services provider IT-Ernity Internet Services BV, does have a track record it can trade on. It has made a money multiple of 2.5 times across its three previous funds, and an aggregated internal rate of return (IRR) of 25%.

Over the past two decades it has made 32 "headline" investments, often in companies it can use as buy-and-build platforms for consolidation in particular markets, and sometimes across borders within Europe. In addition to those base investments, GMT has made about 70 bolt-on acquisitions over the years.

Right now GMT is working on three add-ons, including one it hopes to put in place as early as this month and the others by the end of September. Green declined to go into further details about the pipeline, although he did say the firm was not working on any imminent exit opportunities.

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