In Profile: Corvm Capital Partners

After Frost Brooks, add another to the list of new private equity outfits going down the deal-by-deal route: Corvm Capital Partners (pronounced "corum", with a Latin spelling similar to Bvlgari's). Launched at the end of 2014 to target the European mid-market - and, to a lesser extent, the US - the GP aims to raise ad hoc capital for each transaction.

"We faced two challenges when setting up Corvm. The first was the time required to raise funds in the current environment. The second was the ability to deploy large amounts of capital on mid-cap transactions within a limited investment cycle. A number of players have been able to raise sizeable funds in the mid-market, but have only managed to deploy half of it at best within the timeframe allocated. Investment opportunities remain scarce, which in turn can foster badwill with LPs," says co-founder Arthur Dessenante (pictured), who left his senior associate position at HIG Capital to set up the new venture.

The firm, therefore, set its sights on a deal-by-deal model, targeting two pools of potential co-investors. On the one hand, Corvm is looking to work with private equity funds, which currently account for 65% of the potential investors pool and can benefit from a fresh influx of pre-sourced deal opportunities. The remaining 35% of potential partners are family offices. Corvm has segmented this co-investors base (by sector, deal-type preferences, etc.) to be able to ultimately match investment opportunities to the right partners.

The strategy
Corvm targets companies with turnovers ranging between €50–500m, mainly in Europe but potentially in the US as well. While this mid-market segment will remain the sweet spot, the firm will consider other opportunities if they are deemed interesting – for instance, it is currently looking at a smaller company with revenues of around €30m.

The investor is largely sector-agnostic, but will look to leverage the experience gained by its team on past deals in certain industries, such as healthcare, heavy construction, recreational services, automotive and transportation services.

Corvm will focus on leveraged buyout transactions and will be generalist in terms of the company profiles targeted – it is currently looking at one potential deal with a turnaround element, for example, but will also consider high-growth businesses. Given the team's experience – notably that of Dessenante at HIG – Corvm will also look at corporate carve-outs.

Deal-by-deal structures may currently be popular with investors, but one lingering question mark lies with the capacity to execute deals quickly at a time when deliverability can make or break sales processes. Corvm believes it is addressing this issue on two fronts, starting with the groundwork done when establishing its pool of co-investors. The firm has aimed to secure agreements from a network of potential co-investors ahead of time, signing mandates and working on getting agreements in principle, so it can execute quickly when the opportunity arises (with a turnaround time not exceeding three days, according to Dessenante).

Corvm also believes its sourcing strategy will further alleviate the potential downsides of its funding model. The firm claims it can build on its management's track record and network to only bring off-market dealflow to co-investors: it will therefore actively avoid intermediated transactions resulting in large auction processes. "We also provide additional resources, notably on debt structuring, in order to enhance deal velocity and visibility on financial ratios," Dessenante adds.

The team
Corvm is confident the background of its co-founders will allow it to deliver on this sourcing promise, by leveraging a mix of financial, corporate and audit/operational experience.

Founding partner Dessenante worked at HIG Capital from 2007–2014, first as an analyst and then a senior associate – he was involved in deals including Looping, Molex and Aviapartner. Prior to that, Dessenante gained experience in wealth management at Societe Generale.

Co-founder and senior adviser Gérard Perrot spent most of his career in the US. He started in the corporate world at construction materials specialist Saint Gobain. Having subsequently held positions at two other corporates in the US, Perrot returned to France five years ago to work for small US private equity fund Leventis Investments.

Alain Hortion, the third co-founder and non-executive vice chairman, joins from a partner position at LVMH-sponsored fund L Real Estate. Hortion also has a background in the consulting space, having worked as a management and financial consultant at EY/Andersen and managing director at Mazars.

Two assistants round off the team, split between France and the US. Corvm is currently looking to expand with a fourth partner before year-end; according to Dessenante, the firm is in discussions with several potential candidates. Corvm will wait for dealflow before bolstering the support function, in order to keep costs manageable – for the time being, two analysts will be staffed on a deal-by-deal basis to assist on execution.

Read more about deal-by-deal strategies

- New GP Frost Brooks on the importance of personal contribution
- Terra Firma to invest from €1bn committed capital
- Q&A with Duke Street's Buchan Scott

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