Kempen reaches EUR 245m final close for second PE fund

Harriet Matthews
07 April 2022

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Kempen Capital Management has held a EUR 245m final close for Kepmen European Private Equity Fund II (KPEF II), surpassing its target of EUR 200m.

Kempen announced the launch of the fund in July 2021, as reported. It held a first close in November 2021 on EUR 173m.
The fund had a EUR 250m hard-cap, Sven Smeets told Unquote.

"By holding our second and final close, we want to give a clear message to our investors and the private equity community – we don't want to just collect assets, we want to make deals and make the best returns for our investors," he said. "We were crystal clear on what we would do with this fund and the previous one."

Kepmen European Private Equity Fund I (KEPEF I) held a final close in December 2019 on EUR 192.5m, according to Unquote Data, surpassing its EUR 150m target.

KEPEF I currently has a TVPI of around 1.2x, Smeets told Unquote. "The performance of KEPEF I means it is already out of the J-curve and justifies our view on the combination of co-investments and partnership deals: the co-investments bring you out of the J-curve quicker and the strategy offers optimal diversification."

Asked about the timeline for Kempen's next fundraise, Smeets said: "For now, our main task is to take care of the capital that has been committed to us and doing the best investments possible. It's likely that we will be back in the market after a similar period of time to the gap between K£PEF I and KEPEF II. We want to stay true to the small-cap segment."

Investors
"A lot of our LPs come from the wealth management domain, so we have HNWIs, family offices, and various people with entrepreneurial backgrounds, which strengthens the proposition," Smeets said. "Our LPs are predominantly from Benelux and Switzerland."

Investments
The fund makes co-investments and partnership deals (indirect private equity fund investments). KEPEF II has made five partnership deals and has three further deals in the pipeline, accounting for a further EUR 60m-70m; the fund aims to make 10 such deals, Smeets said.

As reported at the time of KEPEF II's launch, Kempen makes co-investments in small-cap deals in Benelux, DACH, France, the UK and the Nordic region. The fund deploys equity tickets of EUR 3m-15m, generally backing companies with enterprise values of EUR 20m-EUR 40m, or up to EUR 100m.

KEPEF II has also made two direct co-investment deals: one is for a Germany-based medical centre, while the other is an undisclosed Nordics-based electrical installation and energy efficiency business. The fund expects to make up to 15 co-investments, as reported.

"We are sector-agnostic and don't have a pre-defined sector preference," Smeets said. "But we have had quite a lot of activity in healthcare and IT, both of which you might call defensive sectors. We review more than 100 opportunities per year, so we have to pick what to do and what not to do."

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