Novum Capital closes second fund on €150m

"The second fund is now up and running, giving us the opportunity to close new deals," Felix Homann, a partner at Novum Capital, told Unquote. "We raised €110m from Fund I investors and €40m from new ones."

Debevoise and Plimpton and P+P Pöllath + Partners provided legal advice. Acanthus Advisers was the placement agent for the fundraise.

The fund's predecessor was the GP's debut, which held a final close in February 2017 on €75m. The vehicle's remaining portfolio companies are marzipan and nougat producer Horst Schluckwerder, TV studio and sound stage agency Magic Media Company and waste disposal business CC Group.

"Firm-wide we are very much invested in deploying the new fund, but if we can opportunistically exit existing investments we are not opposed to it," said Homann.

Homann added that the Novum team is growing as part of the deployment of its latest fund. "We have grown the firm to an investment team of nine, plus one person who works on origination only. We are looking to add one person for portfolio support to have a deal team of 11 who can handle more situations concurrently."

Investors
"All LPs from the first fund have re-upped and increased their commitments," Homann said. "The balance comes from new LPs, one large European family office and US endowments, which is a new investor base for us."

"We again worked with Acanthus as placement agent," Homann said. "We had a close community of LPs in Fund I and it was a very productive exchange. For Fund II, Acanthus selectively put together a few new LPs to broaden our investor base."

The investors from Fund I are large funds-of-funds and pension funds from the US, France and Germany.

The smallest individual commitment to the vehicle was €10m.

Investments
The fund's investment criteria remain unchanged in spite of the coronavirus crisis and the vehicle will follow a similar strategy to its predecessor. The fund will write equity tickets of €20-30m per transaction and invest in companies with EVs of up to €100m, with a minimum EBITDA requirement of around €5m.

It will focus on DACH-based companies, but is not restricted to particular sectors. The fund plans to make six to eight platform investments.

"We will invest in growth capital, primary and secondary buyouts, and carve-outs," said Homann. "In the current market, we may also target more difficult situations where we are really willing to do the work and see what we can do. We are looking for fundamentally healthy businesses temporarily suffering from consumer demand and/or lacking access to financing."

Homann explained that the vehicle gives the GP the option to be flexible when it comes to new investments in a challenging financing market. "We have a leverage facility on the fund that comes in handy in the current environment. For example, we could do a deal, drawing down half from our LPs and use the facility for the rest, then refinance later. It gives more transaction security as we can deal with the financing after the fact."

People
Novum Capital – Felix Homann (partner).

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• Topics
• Funds
• Buyout
• DACH
• Germany
• coronavirus