Capiton sets sights on autumn close for sixth fund

Unquote previously reported that the GP was aiming for a summer close for the fund, which has now been pushed back slightly. Capiton is aiming to raise EUR 550m, with a hard-cap set at EUR 575m, as reported. Poellath is providing legal advice for the fund, while Lazard is acting as placement agent.

The fund is expected to follow the strategy of its predecessor, making mid-market primary deals for companies in the DACH region.

Capiton V held a final close in January 2015 on €440m. The vehicle has made two exits and a number of recaps, and the firm has also sold minority stakes in several of the fund's platform investments.

Hertweck expects that at least 70% of deals from the fund will be made across its core focus industries of pharma, medtech, industrial technology and "responsible consumption". Within these sectors, it looks to concentrate on specific niches such as optical sensors and measurement technologies or pharma engineering.

The firm would consider investing outside these core areas depending on the target with the remaining 20-30% of the fund, Hertweck said. Minority deals could account for around 20-25% of the fund's activity.

Focused solely on mid-market firms in the German-speaking DACH region, Capiton expects to write equity tickets in the EUR 25m-50m range with its new fund, Hertweck said. It looks to invest in profitable companies generating between EUR 50m and EUR 300m in turnover.

With its sixth fund, Capiton is aiming to invest in a larger number of companies rather than pursue bigger deals. "We try to grow maybe EUR 100m with each fund generation, but don't want to move away from the mid-market," Hertweck said. "The number of companies in our size bracket is far bigger than going upmarket, where the pool declines fast, so we really like this space."

The sponsor is looking to do a total of 13-15 deals with the new fund, compared with nine deals from its fourth fund and 12 from its fifth fund. Capiton targets around four deals annually.

The GP has already made four acquisitions with the vehicle while finishing up the fundraise, deploying more than 30% of the new fund, Hertweck said.

Last month, the firm acquired a majority stake in Kutterer Mauer, a manufacturer of caps and closures for product packaging. Other recent deals include its acquisition of majority stakes in Germany-based natural aroma chemicals producer Axxence Group.

Click here for a more in-depth look at Capiton's investment and exit strategies

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