IK Investment Partners returns to small-cap with €277m fund

Partners Kristian Carlsson Kemppinen, Pierre Gallix and Anders Petersson will be heading IK's small-cap team.

Fundraising for the vehicle began in March 2015, Petersson told unquote", with IK targeting €250m and holding a first close on €100m on 30 June of the same year. The GP committed €27m to the fund, with the remainder consisting of LP commitments.

IK believes the small-cap space is a logical extension to its existing strategy and marks a return to the space after a 15-year hiatus. The firm had discussed launching a fund targeting the market segment for a few years prior and had found good support with its LPs, IK stated.

IK Small Cap I Fund is domiciled in Luxembourg and follows market standard terms, according to Petersson.

The small-cap launch stands in stark contrast to the other global trend of increasingly large mega-funds, such as the $13bn Advent International vehicle, which announced its final close yesterday.

The GP mandated Campbell Lutyens as global placement agent for IK Small Cap I Fund, with Macfarlanes providing legal advice.

IK is still investing from its most recent mid-cap fund, the 2011-vintage €1.4bn IK VII Fund, and the firm could not comment on whether it was raising or planning to raise a successor in the near future.

Investments
The vehicle will make investments in companies with enterprise values in the approximate range of €20-100m, across France and the Benelux, DACH and Nordic regions. Equity ticket size will range from €10-30m per buyout, with a provision for making significant minority investments on a selective basis.

Petersson said the vehicle will focus on the same industrial segments and sectors predominating the GP's mid-cap fund: consumer goods, engineering, services and healthcare.

Co-investment opportunities will be offered on a deal-by-deal basis, mainly to LPs invested in the fund.

So far, the vehicle has made three investments: German fire protection and damage management company SVT Group, Franco-Belgian pledge inventory management business Auxiga, and Scandinavian kitchen manufacturer TCM Group.

Petersson said clear procedures are set up to avoid conflicts of interest when exiting companies, including provisions that preclude the GP from selling a portfolio company to another IK fund.

Investors
The fund saw interest from both new and existing investors. It has a roughly equal geographic split between North America and Europe, with LPs including SL Capital Partners, Ardian and the EIF.

Commitment sizes were undisclosed, though Petersson said the minimum subscription was in the low single-digit million euro range.

People
IK Investment Partners – Kristian Carlsson Kemppinen, Pierre Gallix, Anders Petersson (partners); Christoph Masek (CEO).

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• Topics
• Funds
• Buyout
• IK Investment Partners
• Campbell Lutyens
• Small-cap buyout