GP Profile: Greenpeak Partners on emerging manager fundraising and specialisation

Beringer did not disclose the expected final close amount, for Greenpeak Fund II, but said that the GP should have EUR 150m-200m in deployment capacity with Fund II plus co-investments. It previously raised EUR 110m for its debut fund.

Ely Place and Acanthus have acted as placement agents for the fundraise of vehicle, which is an Article 8 fund under the SFDR.

"We felt that raising around EUR 150m in total capital was a realistic goal," Beringer said. "We thought we might get it there a little but faster at the start, but we took half a year longer in the current environment as we are a new fund. We have an almost overperforming portfolio, but with so many large funds drawing money, you need the track record and credibility to raise money – people's capacity for trial and error is decreasing."

The GP is well aware that the current market has been, and continues to be, a particularly tough one for emerging managers. "The industry has professionalised and the only strategy as a small fund you can go for is specialisation," Beringer said. "We specialise in buy and build in three areas: healthcare; and business services, and services for real assets. Technology is engrained into these, and in both sectors, the trend we believe makes sense for us is the environmental and longevity trends that Europeans care so much for."

Greenpeak's investment strategy has left its portfolio relatively well insulated from the current market, according to Beringer. "We always acquire cashflow generating companies and build up larger companies from this," he said. "We have always invested into cashflows at sensible single-digit multiples, so we aren't suffering so much from multiple compression."

Its investment themes have also offered a form of buffer from the current cycle, Beringer said. "There is always some cyclicality out there, and consumer preference can change – but people still go to the doctors, and the environment still needs protecting. The trend drivers are higher than the GDP growth drivers."

Building platforms
Fund II has made five platform investments and is now focusing on add-ons; the GP expects to make three to five add-ons per company from the fund. Greenpeak generally makes 20 deals per year, including add-ons for its portfolio, Beringer said.

Greenpeak typically invests EUR 30m-50m per platform company, with EUR 3m-20m deployed per add-on. It targets businesses based in the DACH region with EBITDA of EUR 500,000-5m and revenues of EUR 5m-50m, according to its website. It focuses on businesses with strong management teams.

The fund's portfolio companies include laboratory data group Academia, ecological testing, inspection and certification provider Certania, building technology service provider Viventec, and healthcare software and IT provider Paratus.

"HVAC buy-and-build for Viventec is a big topic for us at the moment, particularly given the possibility we will be cut off from Russian gas," Beringer said. "We foresaw houses getting greener, but we didn't foresee Russia's war with Ukraine. We are seeing good growth and a lot of interesting opportunities for Certania, too, which focuses on ESG testing and inspection, and there are similar opportunities for Robur."

Robur is an industrial service provider that focuses on assisting companies with digital transformation and ecological change. Its services include planning and realisation, operation and maintenance, relocation, and dismantling and disassembly. The GP owns the company via its debut fund.

"We are still debating whether we want to exit any of our portfolio, it could definitely still happen this year," Beringer said. "The development of our businesses is favourable, but the market might not be favourable for exiting."

Aside from deals, the GP's future plans include preparing for its next fundraise. "We will discuss raising the next fund in September or October as it depends on our deployment," Beringer said. "If we deploy fast, we could come to the market earlier, but a reasonable goal would be 2023."

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