Fund in Focus: Avedon holds final close on €300m

The vehicle held a first close on its €250m target in February 2017, five months after its launch in September 2016.

Avedon CFO Rikkert Beerekamp says they could have stopped there: "We were already oversubscribed in February but we took our time to get an important US investor on board."

Avedon will use the fund to acquire both minority and majority stakes in northern European companies with a turnover between €25-100m.

The GP has already drawn 25% of the new fund and made three investments, all of which it says were sourced off-market. "We look for relatively small niche market leaders to further professionalise them, and double or triple the revenues," says Beerekamp.

NIBC Growth Capital II, Avedon's previous fund, is fully invested with sufficient room for follow-on investments. It held a final close on €190m in August 2013, slightly below its €200m target. Beerekamp says the firm has invested on expanding and strengthening its team in the Netherlands and Germany since then.

The new vehicle's terms are market standard. It has a 10-year fund life with two optional one-year extensions and a management fee of 2% with an 8% hurdle and 20% carry.

Lazard acted as a placement agent for this fundraise and Christopher Good of Macfarlane was Avedon's legal counsel.

Sector focus
The GP engages in what Beerekamp calls "sector studies" to find one-to-one situations. Its four preferred sectors are business services, industrial niches, consumer & leisure, and software and technology. So far it has made one investment in the industrial niches sector, one in software and technology and one that straddles the two.

In March 2017, Avedon created a smart waste management company through the merger of three companies, BWaste, Bronij and Ferro-Fix. The new company uses software developed by BWaste to monitor filling level meters and plan waste truck pickup routes. It combines this with Bronij's capabilities in container maintenance and inspection of containers. Ferro-Fix is an industrial supplier of high-quality metals.

Six months later, the GP made its first pure software investment, acquiring a majority stake in a video conferencing software company created by the merger of VisionsConnected and Viju. The group projects total revenues of €100m for 2017.

Finally, just prior to the close, Avedon acquired German saw manufacturer Wilhelm Altendorf. The total enterprise value was estimated to be slightly less than €50m.

All three companies will have a lot of support available to them, according to Beerekamp: "We have institutionalised our support platform, for example by focusing on strategic direction setting, including pricing, sales effectiveness to boost the top-line and we have a strategic HR adviser that does C-level coaching with management teams to build high-performance organisations." 

Investors
Around 75% of commitments came from European LPs, with the remaining 25% coming from US-based investors. Dutch pension fund APG has backed the fund and €20m has been reserved for the management team, friends and family.

Avedon's previous vehicle was backed by Access Capital Partners, the European Investment Bank, the European Investment Fund, Goldman Sachs Private Equity Group, Schroder Adveq and Avedon's former parent company NIBC Bank.

People
Avedon Capital Partners – Alfred Tulp (partner); Rikkert Beerekamp (CFO).

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