Capvis leads fundraising bonanza with EUR600m

At a time when many international GPs are raising large funds for distressed assets, two DACH-region funds have bucked the trend to raise traditional mid-market buyout funds, both announcing their final closing within days of each other.

Zurich-based Capvis Equity Partners AG has achieved a final closing of Capvis Equity III LP on its hard cap of EUR600m, well ahead of its original EUR500m target.

"We have seen that our strategy has proven successful, so changing it was not necessary. However, we have seen that our potential targets are becoming somewhat larger, and, additionally, we also ensured that there is plenty of reserve for add-on acquisitions to the 10-12 investments the fund will make," explained Rolf Friedli, a partner at Capvis.

Like its predecessor, Capvis Equity II, the new fund focuses on mid-market buyouts in the DACH region, with an emphasis on Switzerland. The typical enterprise value of targets ranges between EUR50-400m.

The second fund, Halder-GIMV Germany II, raised EUR325m in just three months, comfortably surpassing its EUR275m target. The stealth fundraising saw Halder limit its marketing to just existing investors and close contacts.

"As the market slowly returns to more conservative financing terms and less aggressive multiples, we are optimistic that the years ahead are ideal times to acquire companies," stated Paul de Ridder, partner at Halder.

The general climate in Germany remains positive for private equity investments. Since 2001, the number of transactions has increased annually by 30-40%, with only a slight decrease in 2007. 2008 may see a further reduction in deals, but the total number is expected to remain more than adequate.

This is bolstered by the German economy, which has outpaced the European average for the past two years, seemingly not suffering yet from the economic cooling observed in the US.

Halder's new fund is twice the size of its predecessor, Halder-GIMV Germany, raised in 2005. The firm reported a successful 2007, with two strong exits averaging a triple digit IRR and a multiple of cost of more than 4x and fully returning total contributed capital by the end of 2007.

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