Montagu's new fund to be first since crash

Montagu Private Equity is set to be the first big name British buyout group to start raising a major investment fund since the market collapse in summer 2007.

Montagu, which counts waste management company Biffa among its portfolio of companies, is understood to be planning to raise a fund worth around €2bn (£1.7bn).

A spokesman for the company said that a firm decision on a new fundraising would not be made until it had fulfilled its current obligations.

"At some point during the next 18 months, Montagu will consider raising a new fund," he said. "We are 60 per cent invested in our current fund and are contractually not permitted to market a new fund until we are at least 66 per cent invested."

A private equity placement agent – someone who raises funds on behalf of a buyout group – said most players in the sector will not approach investors until 2011, when the market is expected to have improved. "It will be a slog and it could take Montagu 12-to-18 months of fundraising to complete," the agent added.

"It will be the first big UK private equity fundraising since the crash. Anything that has been completed since that date was launched beforehand."

Montagu should have strong backing for a new fund as it is widely considered to have been one of the best performing private equity groups of the past few years. The group is selling British Car Auctions (BCA), the secondhand dealership, for £600m. Montagu has also put Survitec Group, the aerospace and marine survival equipment manufacturer, on the block.