SGT Capital at halfway point of USD 2bn fundraising ambition

The Germany and Singapore-based sponsor began fundraising for Fund II last autumn, following the availability of Covid-19 vaccines and the lifting of travel restrictions, Pacini said.

The fundraising effort follows the full realisation of its USD 1bn Fund I in early 2020, shortly before the Covid-19 lockdowns, returning USD 2.3bn to its LPs with gross returns of 27% IRR and a money multiple of 2.3x.

Investors
For the fund’s first close, SGT has secured commitments from a geographically diversified institutional base that includes asset managers, endowments, and pension funds among others, Pacini said.

Investments
Fund II is expected to invest in approximately eight companies during its investment period across software and data and analytics, medical technology and high-end industrials, Pacini said.

SGT Capital typically acquires businesses that are in the top three market players in their niches, which provides for inherent downside protection, Pacini said. Businesses headquartered in Western Europe, including Israel, and selectively in North America, are within its target area, he said.

One of the key growth strategies for SGT’s portfolio company is internationalisation, in particular in Asia, said Pacini, who brings to the firm a network in Asia following a decade-plus stint as Asia alternative heads at JP Morgan and BlackRock based in Hong Kong.

The fund’s first close coincided with the announcement of the fund’s first deal closure Utimaco, a German cybersecurity and compliance specialist, following regulatory approvals. EQT retains a minority share in the business after having announced its agreement to sell the company to SGT Capital last August, as reported.

Bain Capital Credit as well as institutional investors including Capital Dynamics, Flandrin Financial, University of Wisconsin Foundation, Commonfund, UBS Wealth Management and others have also invested alongside SGT in the deal, according to a statement.

During SGT’s expected three- to five-year hold period, Utimaco will be actively pursuing M&A bolt-on opportunities in Europe, the US as well as Asia. The latter currently accounts for low double-digit percentage of its revenue, said Carsten Geyer, co-managing partner.

In 2020, Utimaco reported between EUR 70m - EUR 80m revenue and EUR 18m EBITDA, as previously reported by Unquote sister publication Mergermarket. The company was expected to reach EUR 20m EBITDA for 2021. Geyer declined to comment on its latest financial figures, although noted that its EBITDA has grown since, thanks in part to its latest acquisitions Celltick and organic growth.

People
SGT Capital – Joseph Pacini, Carsten Geyer (co-managing partners).
Utimaco – Stefan Auerbach (CEO).

 

[Editor's note: The first paragraph has been amended to clarify that SGT Capital has a fundraising target of USD 2bn and not EUR 2bn as stated earlier.]

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