Evoco holds €93m first close for third fund

The Luxembourg-domiciled vehicle has been on the road since the end of 2019 and is targeting €150m. It expects to hold a final close before the end of 2020.

The GP's predecessor fund held a final close in September 2016 on €105m. The vehicle deployed equity tickets of €25-100m.

Evoco is headed by founding partners Michel Galeazzi and Felix Ackermann, and has a team of nine people. The firm does not acquire single assets, but rather multiple assets in one transaction, as Galeazzi explains: "We acquire portfolios of direct investments, as a bundle of direct majority holdings. So we buy three or four companies from one vendor that wants to close a fund or change investment strategy. We keep the assets separate from each other."

Asked if the coronavirus crisis affected the fundraise, Michel Galeazzi, co-founder and partner at Evoco, told Unquote: "We have very strong backers and we basically switched the fundraise to take place online in mid-March, doing video conference calls instead of face-to-face meetings, which has worked very well."

MJ Hudson and Arendt & Medernach are advising on the fundraise. The vehicle follows standard market terms and conditions.

Investors
The GP has committed €6m to the fund on first closing. The vehicle's LP base currently consists of European single-family offices and institutional investors. Half of the firm's capital has come from new investors at its first close. The European Investment Fund has backed the fund, according to Unquote Data.

Investments
The fund plans to invest in mid-market companies based in Europe, targeting businesses with a turnover of €30-250m, and deploying equity tickets of €30-60m. The fund has a five-year investment period and plans to acquire four or five portfolios of three or four businesses, comprising around 20 companies in total. The firm focuses on industrial businesses, and consumer companies.

Asked about deal-making prospects in the current market, Galeazzi said: "We have quite a strong deal pipeline; many investors in such assets are revisiting their strategies, especially PE funds that might not cross their carry hurdle or will have a delay, or family holdings that want to change their strategies and divest three or four businesses at the same time. We offer a solution so they can divest three or four companies in one transaction. In these times, there will be more vendors who will be looking to make strategic decisions about their portfolios. The strategy worked well in the boom time, but we think that it will work even better in more volatile times."

People
Evoco – Michel Galeazzi, Felix Ackermann (co-founders, partners).

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