European Fund Briefs, November 2012

European Cash Propels VNT’s Cleantech Fund

A €25 million ($31 million) commitment from the European Investment Fund (EIF) has bumped up VNT Management’s third cleantech fund to €72 million ($89 million).

The Vaasa, Finland-based firm is now just €3 million ($4 million) short of its target after two previous closings, the second of which raised €30 million ($37 million) from the EIF and Finnish investors.

Like VNT’s previous vehicles, Power Fund III will make minority investments in early and growth-stage energy technology companies, and will focus on electrical systems developers.

The firm will invest from €2 million to €10 million ($2.5 million to $13 million) per company, mainly in the Nordics and German-speaking countries.

Its previous fund closed at €63 million ($81 million) and is now restricted to follow-on investments.

New Wellington Fund Strides Ahead

Munich, Germany-based Wellington Partners has held a first close of its fourth life sciences fund with €70 million ($87 million) in commitments for Wellington Partners IV Life Science.

The fund is targeted at €120 million ($149 million), and it appears to be well on the way to surpassing its previous life sciences fund, which raised €78 million ($97 million).

The new firm has already used the new fund to lead a €2.6 million ($3.2 million) Series A round in Ayoxxa Biosystems.

The firm expects to see plenty more opportunities due to the scarcity of European life science funds.

“Life sciences are highly neglected by investors despite the fact that they are probably the largest long-term growth sector,” Rainer Strohmenger, general partner at Wellington, tells VCJ.

The firm has secured commitments so far from several large family offices, the European Investment Fund, LfA Foerderbank Bayern and Austria Wirtschaftsservice, among other U.S. and Middle East investors.

Siparex Flexes Fundraising Muscle

Growth capital investor Siparex has credited existing investors for a quick initial close of its third mid-market fund.

The Lyon, France-based firm hit €90 million ($112 million) after four months of fundraising thanks to support from Siparex Associés and other limited partners.

Only 10% of fundraising so far has come from outside France; this includes a commitment from a Canadian pension fund.

Similar to its previous two funds, the target for Siparex MidMarket III is €150 million ($186 million), and it will invest mainly in French companies worth less than €40 million ($50 million).

Although the firm has no sector focus, about half of its second fund was invested in French industrial companies.

The first deal from the new fund should be announced before the end of this year.

Siparex also hopes to complete two more exits from its second fund by early 2013, following two full realizations and one partial exit in the past 12 months.

Tar Heel Sticks on €50M

Poland-focused private equity house Tar Heel Capital has finalized its debut institutional fund at €50 million ($62 million) to exploit what it sees as a lack of investor competition in its target market. 

The Warsaw-based firm has invested in small to medium enterprises in Poland since 1998, but has previously sought capital on a deal-by-deal basis.

“Raising an institutional fund was a natural step for us to broaden our investor base and to slightly increase the average equity ticket of our transactions,” Andrzej Ró?ycki, a partner at Tar Heel, tells VCJ.

Tar Heel aims to invest from €2 million to €15 million ($2.6 million to $19 million) in companies generating annual sales of at least PN15 million ($5 million).

Although investment is not tied to particular sectors, Ró?ycki says Tar Heel would like to focus on modern manufacturing and industrial and B2B services.

Tar Heel’s most recent investment was the October 2011 management buyout of Livechat, which develops website communication software.

Ludgate Plans New Cleantech Fund

London-based cleantech investor Ludgate is preparing a new fund that it hopes will be two to three times larger than its debut vehicle.

Its initial Ludgate Environmental Fund (LEF) is now fully invested after raising roughly $100 million across three separate fundraisings from 2007 to 2010.

“Dealflow is rich and we could have deployed more capital,” says a Ludgate spokesman.

LEF’s successor will focus on similar sectors—waste and recycling, renewable energy, energy efficiency, and water—but will be structured as a limited partnership rather than as a listed closed-ended investment company.

Commitments to the new fund are likely to come from institutional investors, fund-of-funds and family offices.

Baring Sets Russian Record

Moscow-based Baring Vostok has confirmed its towering status in Russia’s private equity market by securing $1.5 billion of commitments for its fifth mid-market fund.

In contrast, other Russian and CIS funds combined raised just $135 million in 2011, according to the Emerging Markets Private Equity Association.

Baring Vostok Private Equity Fund V had reached its hard cap of $1.15 billion, but then surpassed the firm’s 2007-vintage, $1.4 billion Fund IV with $350 million of additional commitments to form a supplemental fund.

Although there was a high level of repeat investment, Baring Vostok also attracted new institutional investors from North America, Europe, the Middle-East and Asia.

The new fund will invest from $30 million to $200 million in companies from Russia and the former Soviet Union.

The firm’s previous fund comprises 15 companies and is now closed to new investments.

Demeter Welcomes State Cash

Several public bodies have got behind Demeter Partners’ third seed fund for environmental technology businesses, which has reached a first close at €43 million ($53 million).

CDC Enterprises, an investment institution backed by the French state, has committed €15 million ($9 million). Other investors include the European Investment Fund and IFP Energies Nouvelles, a state research body.

The fund will invest mainly in French, German and Spanish businesses that work in environmental industries and green energy.

Final target has not been disclosed, although recent Demeter funds became progressively larger: FCPR Demeter I raised €105 million ($135 million) while FCPR Demeter II raised €204 million ($250 million).

Demeter has assigned about 60% of its prior two funds to expansion capital opportunities and 20% to venture capital, and it will consider all stages of investment for its latest fund.

Compiled by Alex Derber