Kempen European PE fund closes on €192.5m

The fund had a target size of approximately €150-200m. Launched in early 2019, it held a first close on €76m in February, a second close on €120m in June, and a third close on €158m in September. The fund's hard-cap was set at €200m.

Kempen charges a management fee of 1.25% and no carry, Unquote has learned. The firm adopted these competitive terms partially because of reluctance from some of its pension fund LPs to pay carried interest.

The GP is aiming for 12-15% net IRR on the invested capital for investors in the fund.

The asset firm is not new to PE. Kempen merged with private bank Van Lanschot in 2007, and the latter raised funds in 2005, 2007 and 2009. Marvin de Jong, one of the current fund managers, was an investor in the previous Van Lanschot PE funds.

Investors
The private equity fund was exclusively available to clients of private bank Van Lanschot and asset manager Kempen. Up to 80% of commitments in the funds came from individuals. Investors consist predominantly of former entrepreneurs and experienced private equity investors based in the Netherlands, Belgium and Switzerland.

The initial subscription and minimum holding amount was set at €250,000. Van Lanschot and Kempen's staff also invested in the fund with their own private capital.

High-net-worth individuals that are invested in the fund will also provide help with deal sourcing.

Less than 20% of commitments came from institutional investors, mostly endowments, based in the Netherlands, Switzerland, Belgium and the UK. Family offices have also backed the vehicle.

Investments
Kempen European Private Equity aims to build a portfolio of approximately 10 investments, of which around five should be co-investments. Family-owned businesses are likely to be targeted.

The majority of deals should take place in a bilateral fashion and are likely to be primary buyouts of family-owned companies.  

The GP is adamant about remaining disciplined in terms of multiples paid for the companies. It is aiming to buy companies at around 6x EBITDA for this fund's deals.

The fund is sector-agnostic, but it expects to invest in the healthcare, consumer goods, business services and industrial sectors.  

The vehicle invests mostly in companies with enterprise values of €20-40m, providing equity tickets of €3-15m. The GP expects to deploy the fund equally across five regions: Benelux, DACH, France, the UK and the Nordic countries. The vast majority of investments should be buyouts, though the GP could also complete some expansion deals. 

Kempen European PE is already deployed in four deals, three of which are based in the Netherlands: DIT Holding specialises in the training and employment of engineering, metal and painting professionals; Avion is a developer of high-tech full-motion flight simulators; the Wilvo Group is a metal parts and assemblies manufacturer; and UK-based Apem is an environmental consultancy firm. A deal involving a company in the healthcare sector is underway and should be announced in early 2020.  

On an individual investment level, Kempen targets a 20% IRR and 2.5-3x money multiple. 

People
Kempen Capital Management – Sven Smeets (co-head of private markets); Marvin de Jong (director of private markets).

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• Benelux
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