Vendis 'very much in business' with fourth consumer fund in play

Min Ho
03 October 2022

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Consumer investor Vendis Capital remains “very much in business” with plans to raise EUR 450m for its fourth fund despite a gloomy consumer sentiment outlook, partner and co-founder Michiel Deturck told Unquote.

Pre-marketing for the Brussels-headquartered sponsor's fund is in progress with many of its existing LPs indicating interest in re-ups, he said. It will also seek new LPs from other geographies, including North American, Middle Eastern and Asian asset owners, as part of a diversification move, he added.

Plans for the new fund follows plans to have Vendis Capital III, which raised EUR 300m in 2019, deploy its remaining 40% of capital in three to four more platform investments by next year, he added.

The new fund will seek opportunities in various consumer subsectors across Europe, he said. Companies generating between EBITDA EUR 3m and 20m will be within its target range, although the fund will have a sweet spot of EBITDA EUR 5m-EUR 10m, he added.

Deturck acknowledges that the sponsor is operating in a challenging sector, with consumer confidence hitting a 25-year low in Europe, but he is confident that the GP's focus on disruptive "scaleup" companies – those with a proven track of record of 10% annual growth and operating in structural long-term themes, such as digitalization and sustainability – will help maintain their growth momentum.

"Of course, we are cautious, but we are very much in business, because we see lots of interesting opportunities," he said, noting that market volatility will throw up interesting companies with discounts to their valuations.

"Nobody was nervous over the last four or five years when everyone was smiling and doing deals at very high prices, while I was uncomfortable with that and nervous about valuations," Deturck said. "Right now, I see that many people are uncomfortable in our industry, which I think is a very welcome adjustment. I think the 2023-2025 vintages will be very, very good."

Among Vendis' latest investments include Mountain Village, a Swedish producer and group of disc golf brands, Dutch online cosmetics brand Pink Gellac, as well as construction brick toys for adult BlueBrixx.

Under its ownership, the sponsor typically uses five levers to grow its companies: rolling out the brand or concept across its domestic market, internationalization, distribution channel buildups as well as buy-and-build, he said.

It typically scans through between 200-400 companies per year, half of which are reliant on advisory deal flows, with the remaining through their own outreach programmes, he said.

Receptive to approaches
Vendis is expecting a slow in its exit with no divestment penned for at least the upcoming six months, although it is receptive to "surprises" should potential buyers show interest for its businesses, he said.

The GP has exited three portfolio companies from Vendis II with six more exits expected from the 2015 vintage, he said.

Some of its most recent exits include Dutch beanbag brand Fatboy, which generated more than 5x money-on-money multiple in its sale last year to Italian furniture designer Calligaris, he said. Last year also saw the divestments of Belgian pharma consumer specialist Sylphar to Swedish pharma group Karo Pharma, as well as Dutch women fashion brand Ateliers Humanoid to the management.