Kempen Capital launches second private equity fund

The GP's first private equity vehicle, Kempen European Private Equity, held a final close in December 2019 on EUR 192.5m, according to Unquote Data, surpassing its EUR 150m target. The fund has now made nine partnership commitments and 12 direct investments, with one further deal still pending, managing partner Sven Smeets told Unquote.

"We are expecting a first close in October 2021, although it is hard to say yet if it will be both a first and final close," Smeets told Unquote when asked about the timeline for the fundraise.

The fund is a closed-ended vehicle with a 10-year fund term. The GP expects around half of its target portfolio to comprise direct co-investments. Like its predecessor, the fund will also make partnership deals, which are indirect private equity fund investments.

In addition, the GP manages an open-ended fund-of-funds, Kempen Private Markets Fund. The vehicle invests in global PE, infrastructure, land and real estate funds. It had raised EUR 123m as of September 2019, according to Unquote Data.

Investors
The GP's first private equity fund was available solely to clients of Kempen and private bank Van Lanschot, with a minimum subscription and holding ticket of EUR 250,000.

"We are looking for high-net-worth individuals, family offices and potentially institutional clients, as long as the timelines match on both sides," Smeets told Unquote. "We are expecting a similar LP base to Fund I."

The second private equity fund will be offered to investors in the Netherlands, Belgium and Switzerland, according to a statement, with the aim of making private equity a more accessible asset class for a range of investors beyond large institutional LPs.

Investments
Kempen focuses on small-cap deals in Benelux, DACH, France, the UK and the Nordic region. The fund will follow the same strategy as its predecessor, deploying equity tickets of EUR 3m-15m, generally backing companies with enterprise values of EUR 20m-40m, or up to EUR 100m.

"We already have some potential deals in the pipeline," Smeets told Unquote. "Being active in the small-cap segment means there is no shortage of potential interesting deals; there is more competition if you go up a few deal bands." He added that Kempen expects to make around 15 direct deals, as well as a handful of partnership deals.

In June 2021, Kepmen invested in Germany-based optician and audiologist chain Ounda, as reported. Small-cap focused GP Beyond Capital Partners (BCP) formed the company in June 2020 as a buy-and-build platform, as reported. "Ounda is a perfect example of what we are looking for: the investment is about buying "mom and pop" shops, with a clear rollup strategy, alongside BCP," Smeets said. "It is also attractive in terms of a future exit; once we have succeeded, it could be an interesting candidate for a variety of potential buyers."

Smeets also cited Tellus Group as an example of a typical deal that the fund will make. "Similarly, in Norway, we have a retail chain of campers and caravans that we invested in with Credo, combining the individual retailers to create a significant group in this part of Europe. These are the kind of deals that investors can expect in this fund, too."

People
Kempen Capital Management – Sven Smeets (managing director of private markets).

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