Mirabaud launches second PE fund

The fund has a target of €200m and expects to hold a first close on €50-100m at the end of Q1 2020.

The fund's predecessor, Mirabaud Private Equity Fund, targeted established businesses in the luxury consumer and lifestyle sector. The fund was announced in February 2017 and held a final close in December 2018 on €150m.

The previous vehicle was based in France and had a 2% management fee with 20% carry and a 7% hurdle. A minimum target return of 10% was set for the fund but the GP hoped to make 12-15%, as reported by Unquote.

Mirabaud has appointed new partner David Wertheimer, who has experience in the fashion industry and will co-manage the fund.

Investors
The fund expects to receive commitments from a range of family offices and institutional investors, with a similar-sized LP base to its predecessor, consisting of two-thirds institutional investors and one-third private investors and family offices. The vehicle expects to see interest from European and Asia-based private and strategic investors.

Renaud Dutreil, head of private equity at Mirabaud, told Unquote that the vehicle expects to see commitments of €10-30m from institutional investors, with smaller tickets from family offices and private investors.

The firm's previous vehicle had a base of 30 LPs, comprising private and institutional investors. The GP commitment was 1% and the vehicle offered co-investment opportunities from €1m.

Investments
The vehicle will deploy equity tickets of €10-20m per investment, with the option for LPs to co-invest to provide larger equity tickets. It will take majority and minority stakes, investing in a maximum of 20 companies, including 5-10 early-stage companies.

Dutreil estimates that 80% of the fund will be invested in Europe-based companies: "We will mainly invest in continental Europe but we don't exclude investing in UK- or US-based companies, and potentially Asian companies."

Dutreil told Unquote that the fund will target two investment strands: emerging B2C businesses and brands in the lifestyle sector, including beauty, cosmetics, fashion and jewellery; and B2B companies bringing new technologies and innovation to the consumer goods market through disruptive marketing, distribution, production or management models.

The firm's previous vehicle targeted "living heritage" companies with a 30-40-year history, but the Lifestyle and Impact Fund will target newer businesses, with a small part of the fund being held back for early-stage companies. Asked about the new focus, Dutreil told Unquote: "Doing dealflow analysis, we were able to identify interesting companies that don't meet the criteria of the first fund and it was clear that we should find a solution to invest in those companies, too."

Sustainability will also be a key focus of the fund. Dutreil told Unquote that the fund will have a clear measurable framework of ESG methodology and will target a number of areas. It will focus on the sourcing of raw material for the products made by the businesses it invests in, including the potential to replace certain raw materials such as leather or diamonds with sustainable materials. Craftsmanship and the training of staff will also be a focus, according to Dutreil: "We believe that craftsmanship is revitalised by the appetite of consumers for authenticity and transparency in terms of know-how and skills, so it is something we are focusing on, and we want to attract young people and new talent." Environmentally friendly shipping and transportation of goods is a further focus of the fund's investments.

The vehicle has several potential investments in the pipeline, Dutreil said.

The fund's predecessor targeted businesses with revenues of around €50m. Investments from Mirabaud's first vehicle include the acquisition of a minority stake in sports clothing brand Le Coq Sportif for €10m in March 2019.

People
Mirabaud Asset Management – Renand Dutreil (head of private equity); David Wertheimer (partner).

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