Cardinal raises initial €175m for follow-on private equity fund

Cardinal Capital has secured an initial €175 million from investors for a private equity fund the Dublin-based investment firm is establishing as a follow-up to a portfolio it set up seven years ago with US asset management giant Carlyle Group, according to sources.

Investors in the Cardinal Ireland Partners Fund include insurance, pension and sovereign wealth funds, as well as top executives in companies in which the original fund invested – including chocolatier Lily O'Brien's founder Mary Anne O'Brien and the founders of cash transit company General Secure Logistics Services Chris Clinch and Siobhán Plunkett.

Mike Maloney, the former chief executive of payments firm Payzone, in which the original fund was also invested, has also joined Cardinal Capital's private equity team and invested in the new fund. Mr Maloney's move to join Cardinal Capital was previously reported last month.

Investment sectors

The new fund is expected to close by the end of March, capped at €300 million, according to sources. It aims to invest in about eight companies over its lifetime, focusing on the technology, food, financial services and healthcare sectors. A spokesman for the company declined to comment on the fundraising.

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The development comes as Carlyle Group's Irish team that worked on the €290 million Carlyle Cardinal Ireland (CCI) fund, set up in 2013, formed a separate firm late last year, called Melior Equity Partners. They are said to be planning to raise €175 million for private equity deals, putting them in competition with Cardinal Ireland Partners Fund.

CCI invested in 11 companies in a recovering economy over the past seven years, including Lily O'Briens, cooked meats company Carroll Cuisine, insurance and roadside assistance provider AA Ireland, payments firm Payzone and the City Bin waste management business.

The fund has sold on its majority stakes in Lily O’Brien’s, Payzone and General Secure Logistics Services in the past two years.

Original portfolio

Tullamore, Co Offaly-based Carroll Cuisine, where CCI backed management in acquiring the business from Swiss-Irish food group Aryzta in 2015, is reported to be preparing to put itself on the market.

The investment term of the original CCI portfolio came to an end last year, even though most of the investments remain in place. There were never any plans of a follow-on CCI fund.

Cardinal Capital is led by financiers Nick Corcoran and Nigel McDermott, who committed money to both funds. John Dolan leads up the private equity unit.

Cardinal Capital launched a property development fund in 2015 with Wall Street investor Wilbur Ross, who went on to become Donald Trump's commerce secretary.

The so-called WLR Cardinal Mezzanine fund has invested over €500 million in real-estate projects with a gross value of over €1.3 billion, according to the company’s website. The company raised money for a follow-on real-estate fund last year.