Karmijn Kapitaal holds first close for third fund

The fund is targeting around €100m and will follow the same strategy as its predecessor funds.

The fundraising process for Karmijn Kapitaal III took place during the coronavirus pandemic, partner Désirée van Boxtel told Unquote. "It has been a strange year due to Covid, and that also goes for fundraising. But we were able to do some more deals in Fund II, and it was good that we could take our time. It was impossible to fly or travel and we noticed that the international investors – especially the ones who were not invested in Fund I and II – wanted to see us in person. But everybody wants to do business again and things are back on track."

Karmijn Kapitaal II held a final close on €90m in June 2016, while the GP's debut fund closed in November 2013 on €50m.

The firm simultaneously announced the promotion of Freerk Smit and Niels Molewijk to partner. Smit heads the firm's financial portfolio management and investor relations activities, while Molewijk is in charge of new investments.

Investors
The fund's LP base currently comprises around 80% existing investors and 20% new investors, van Boxtel said, adding that the LP base will be similar to that of its predecessors.

LPs in the GP's previous funds include Dutch high-net-worth individuals and family offices, as well as international institutional investors. The European Investment Fund also committed to the firm's second fund, according to Unquote Data.

Investments
The fund will continue the strategy of its predecessor vehicle, targeting Dutch SMEs. Fund II deployed equity tickets of around €2-10m, according to Unquote Data, making both buyout deals and minority investments. Fund III can deploy tickets in the €2-12m range, with an average ticket of €6m. The vehicle will target businesses with enterprise values of €10-30m and will make around 12 platform deals.

"We have always been a broadly oriented fund," van Boxtel said. "We invest in gender-diverse companies and our focus is on B2B products and services. We are also working actively on some occupational healthcare investments. We also like to look at interesting B2B and B2C consumer brands, and we have a lot of knowledge of those markets."

The firm has a strong deal pipeline for its latest fund, van Boxtel told Unquote. "The market is very busy. In hindsight, last year was a very slow year. There was some traction last summer, but the interesting deals are coming back now and we are experiencing an intense year. We closed two deals last year and we closed two just before the summer, with another two in autumn."

The GP's most recent platform investment is identification applications provider BPI Services, which serves public organisations including the Dutch police. The GP is actively looking for add-ons for the company, van Boxtel said, adding that the firm's new deals are currently at the due diligence phase or at a point where the GP is in exclusivity.

Karmijn will also continue its focus on diversity, having been founded by its three female partners in 2010. "We have always said that our firm started because research shows that diversity pays off financially," van Boxtel told Unquote. "As we were founded by three women, we also expected that there could be dealflow coming towards us from an untapped market. Many companies with female CEOs, COOs, CFOs etc tend to find us."

However, the firm's focus on diversity goes beyond pure numbers, van Boxtel said: "We want to see a balance in gender in the top management team. But we don't just count heads – diversity is more about leadership styles and ways of thinking. We want to understand if this balance in leadership styles also plays out in the company, including in risk-taking or risk management, people orientation, and the company's long and short-term focus. We believe this makes better and more sustainable companies."

People
Karmijn Kapitaal – Désirée van Boxtel, Hadewych Cels, Cilian Jansen Verplanke (partners); Freerk Smit (financial portfolio manager).

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