CINVEN has completed fundraising for its first dedicated financial services fund, raising €1.5 billion in a rare move by a private equity firm to create an industry-focused pool .

he UK buyout company has reached the final close of the Strategic Financials Fund, which has already made three investments after a longer than expected fundraising process. It will focus on insurance, reinsurance, specialty asset-backed finance, wealth management, insurance distribution and other small-cap areas, according to a statement on Monday.

The private equity fundraising environment has toughened in recent months after a period of unprecedented growth.

Institutional investors are reducing the number of funds they support and have begun to avoid certain companies with no clear specialization.

The new fund will allow Cinven, which has a long track record of investing in financial companies, to pursue smaller targets in the industry.

This strategy could put it in competition with European investment companies such as Blackfin Capital Partners and AnaCap Financial Partners.

The financial services fund will deploy around 150 to 400 million euros for an average transaction, Caspar Berendsen, a partner who leads Cinven’s financial services team, said in an interview.

It will charge lower fees than Cinven’s flagship redemption pools and aim for a multiple of three times the money, he said.

Cinven made its first investment through the new fund in 2021, partnering with Singapore sovereign wealth fund GIC Pte to acquire specialty insurance broker Miller.

It partnered with British Columbia Investment Management in April last year to buy Compre, a consolidator specializing in legacy portfolios of non-life insurance products.

In February, Cinven agreed to buy a majority stake in International Financial Group Ltd., a provider of life insurance and savings products backed by Vitruvian Partners.

Cinven already had financial investments in its portfolio before launching the dedicated fund, including life insurance market consolidators Eurovita Holding in Italy and Viridium Group in Germany. The company was founded in the 1970s to manage the pension assets of British coal miners. Cinven launched its first independent fund in 1996 and has raised more than 37 billion euros since its inception, according to its website.

Bloomberg