European Fund Briefs, September 2012

Beer and Buyouts

Dreamed up in a Munich beer garden, a new private equity house is set to launch in Germany.

Emeram Capital Partners is the brainchild of Eckhard Cordes, former CEO of supermarket chain Metro, and Christian Naether, who retired from Apax Partners last year.

The new firm, named after the men’s local pub, will target the German mid-market, though little information has emerged about its first fund.

Cordes and Naether have known each other for many years, and both were involved in talks about a possible sale of a Metro subsidiary to Apax in 2011.

Other members of the new firm include Kai Koeppen and Volker Schmidt, both former partners at global private equity firm Riverside.

Cordes has a reputation as a turnaround specialist and has served on the board of Swedish private equity investor EQT Partners.

Fifth Akina Fund Reaches First Base

Swiss fund-of-funds manager Akina can start deploying its fifth fund after reaching a first close at €174 million ($216 million).

Like its predecessors, Euro Choice V will continue to target the lower end of the European mid-market, taking stakes in buyout, growth capital and special situations funds. It will also buy second-hand fund interests.

Zurich-based Akina takes a pan-European approach, though in recent years it has weighted its portfolio increasingly toward Western and Northern Europe.

The firm expects to announces further closings after the summer, though it still has some ground to make up to match the €512 million ($630 million) it raised for its fourth fund in 2009.

Roughly 60% of Euro Choice V’s investors come from the United States and the rest are from Europe. Family offices and endowments comprise about a quarter of the LP base, which is otherwise represented by public and corporate pension funds.

Five Arrows Punctures Target

Multi-billion-dollar secondary deals may be making the headlines at present, but Rothschild’s merchant banking division wants to slip “below the radar” with its latest small to mid-cap secondary fund.

Five Arrows Secondary Opportunities III (FASO III) will invest up to €50 million ($62 million) per deal for portfolios of European companies, and has already completed one purchase from a financial institution.

Rothschild will also buy portfolios of fund shares.

The fund (FASO III) closed well above target at €259 million ($321 million) following strong support from institutional investors (although no pension funds were involved) and family offices; these comprised about 80% of the fundraising and Rothschild provided the rest.

The fund’s management team, based in Paris, has been together since 2003 and oversaw both previous FASO funds, which were raised internally by Natixis bank.

Inflexion Tops up Buyout Fund

London-based Inflexion Private Equity has cruised to another snappy close, reaching £100 million ($156 million) in six weeks for a co-investment fund.

Existing investors in the firm’s £375 million ($590 million) buyout fund, raised in the course of a few months in 2010, needed little convincing to support the co-investment fund.

The new fund will co-invest with Inflexion’s core buyout vehicle, buttressing its capacity for follow-on financings.

Inflexion invests across most sectors and has completed three buyouts this year.

Foreign Investors Warm to Conservative Germans

Mounting interest from Asian and United States investors has helped Frankfurt-based buyout house Deutsche Beteiligungs hit a final close at €567 million ($703 million) for its sixth fund.

Deutsche Beteiligungs has promised an additional €133 million ($165 million) of co-investment, taking the fund’s firepower to €700 million ($864 million).

American institutional investors pumped roughly €140 million ($173 million) into the fund, while Asian institutions contributed about $80 million.

That contrasts with 2003, when Asian and United States investors together comprised just 10% of Deutsche Beteiligungs’ €434 million ($535 million) fourth fund.

A spokesman for the firm credited its conservative investment approach, which eschews debt financing, for the latest fund’s popularity.

Deutsche Beteiligungs targets industrial and services companies in German-speaking countries.

Autonomy Founder Plans Different Venture

Rumours are swirling that British IT entrepreneur Mike Lynch is preparing a global venture capital fund to back early stage tech startups.

According to Bloomberg, the fund will be based in London and will be advised by certain executives from Autonomy, the data analysis company bought by Hewlett-Packard for $10.3 billion in 2011.

Lynch departed as CEO of Autonomy this year after a period of declining sales.

He founded the company in 1996 in Cambridge, U.K., where it was one of the originators of the city’s tech cluster.

Compiled by Alex Derber