ECM holds final close on €325m hard-cap

The vehicle was launched in May 2017 and was fully allocated with demand exceeding €500m by the time it held its first and final admission session on 3 May 2018, Unquote understands.

It is the first DACH-based primary buyout fund to hold a final close in 2018, following a first close by competitor Steadfast Capital Partners earlier this month. 

The GP conducted two very limited marketing trips to the US, during which it secured a €35m commitment from Rhode Island State Investment Commission.

Its predecessor, GEP IV, held a final close on €230m in June 2012 and was reporting a gross IRR of 33% and a net IRR of 17% by the end of Q1 2018, corresponding to money multiples of 2.0x gross and 1.5x net. It has since made a further divestment, selling Medifox to Hg in a deal thought to be worth close to €300m.

ECM said GEP IV will have returned distributions to LPs exceeding 80% of fund commitments including proceeds from the Medifox sale. It is currently 88% drawn across seven platforms and plans to make additional bolt-ons with the remaining capital.

GEP V is expected to be activated by Q4 2018, when the first platform investment can be expected.

The new vehicle will be registered in Germany and therefore will charge 19% VAT (payable to the German state) on its management fee of 2%.

It will be managed by senior executives Chris Peisch, Axel Eichmeyer, Florian Kähler and Bernard De Backer.

Credit Suisse served as placement agent to ECM. O'Melveny & Myers and Flick Gocke Schaumburg acted as legal and tax counsel to GEP V, internationally and in Germany respectively.

Investors
GEP V attracted commitments from 20 LPs from Europe, North America and Asia, including public, corporate and sectorial pension funds, insurance companies, foundations and endowments, as well as family offices.

GEP IV was backed by mostly European LPs, according to Unquote Data. Amundi and LGT Capital Partners were among the largest investors with €20m tickets.

Investments
ECM focuses on DACH-based businesses with enterprise values between €20-80m, and acquires majority and control minority positions for equity investments between €10-40m. Its main source of deals is corporate carve-outs and succession situations, and generally sources using M&A boutiques and local advisers for limited auction processes.

The firm has made 24 platform investments across four funds to date, and fully realised 19 of these for a gross multiple of 3.3x.

People
ECM Equity Capital Management – Chris Peisch, Axel Eichmeyer (managing directors); Florian Kähler, Bernard De Backer (partners).

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