Dutch sponsor Egeria gears up for new fund launch next year

Anastasia Gnezditskaia
05 July 2023

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Dutch private equity firm Egeria is gearing up for launching a new fund next year, with a focus on Dutch and German investments, managing partner Floris Waage told Unquote.

While the size of the fund is yet to be decided on, it will likely be larger than the previous fund, Egeria V, which held a final close on its EUR 800m target in 2017; historically, GPs tend to grow their funds in size with each consecutive vehicle, he noted.

The sponsor targets global institutional LPs from the EU and North America, including pension funds, insurance companies and fund managers. While it expects its previous investors to participate in the new fund, it is open to new investors as well, he noted.

Egeria V is two-thirds deployed and it expects to be fully deployed within the next 12-18 months. It has more than EUR 200m dry powder left for new acquisitions, and it seeks target companies that are headquartered in the Netherlands and the DACH region, with EBITDA of EUR 10m-EUR 40m.

Most companies in the GP's portfolio are pursuing growth via M&A, including German pre-insulated piping supplier for district heating Isoplus and Dutch IT services provider Arcus IT.

Egeria V currently has nine companies in its portfolio and aims to have up to 12, Waage said.

Investment strategy
Egeria has 15 companies in its portfolio in total, across its Egeria IV and Egeria V vehicles. It has just exited frozen snack maker Goodlife Foods, which was a strategic repositioning of a carveout sold to IK Partners.

The sponsor actively supports buy-and-build strategies for its portfolio companies, as well as internationalisation and digitalisation. Egeria tends to focus on mid-market companies with value-for-money offerings, service-oriented and asset-light business models. Among its portfolio companies are specialized wholesalers, as well as IT platform providers with leasing or insurance services, as well as staffing.

Egeria also backs companies involved in light industrial production, such as Dutch B2B rubber food packaging supplier Elastofirm. It typically deploys equity tickets of EUR 50m-EUR 150m, but can also make investments below EUR 50m.

The firm tends to keep companies for five to seven years, bringing them to the next stage of their growth before exiting. It has historically realized an IRR of more than 25%, and has made exits with 3x money multiples, the managing partner said.

Within the firm's current portfolio, pharmaceutical and healthcare packaging manufacturer Clondalkin Group has a Likely To Exit (LTE)* score of 58. Egeria acquired the business in 2016.

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction.