Golding holds EUR 155m first close for latest buyout fund-of-funds

Its predecessor vehicle, Golding Buyout 2018, held a final close in 2020 on EUR 400m.

Golding Buyout 2021 is expected to follow the investment thesis of the strategy’s previous vintage. Since its second buyout fund, Golding has added in secondaries and co-investment components to the strategy by investing in its own dedicated vehicles from the buyout vehicle.

The fund was launched in 2021, Daniel Boege, partner and head of buyout at Golding, told Unquote. “Getting to the first close probably took us a bit longer than anticipated,” he said. “The market environment has not helped, but we are where we want to be in terms of volume and support from new and existing investors.”

The fund set its target at EUR 400m as the GP felt that this was an appropriate size for its target market, according to Boege. “We could go above EUR 400m as it’s not a hard-cap, but small- and mid-cap fund investments work well at this size, as we can write tickets that are meaningful in terms of the sizes of the funds, but we can also be very selective in the investments that we do make,” he said.

The vehicle expects to hold a final close in 2023, according to a statement.

Although Golding expects to see good opportunities for the deployment of its fund, it has adjusted its returns for its latest vintage. “When we started raising this fund, we reduced our usual target of 12-14% net IRR by 100 bps – given the high valuations at the time, we could not imagine that the multiple arbitrage we have seen in our previous funds would continue,” Boege said. “But we have seen that crises and recessions have produced good vintage years for PE in the past, and on top there are now options for improving returns with fund leverage, which will likely still push returns above 11-13%.”

In spite of its challenges, the current fundraising environment presents opportunities for Golding to deploy equity into a range of strategies, Boege said. “We see that most GPs are taking longer to get to their target amounts and getting creative to attract further primary capital,” he said. “In those cases, we are being shown co-investments or secondaries at attractive terms stapled to a primary commitment which at times enable us to structure great transaction for our investors.”

The first close comes shortly after the GP announced the first close of its debut impact-focused fund-of-funds, as reported.

Investors
“We have a strong German investor base across typical PE investors, including savings banks, pension funds, and endowments,” Boege told Unquote. “The LP base is exclusively German money currently, in line with our past funds, and the majority are existing investors.”

The fund expects to maintain a similar LP base as it heads towards its final close. “Given the maturity of the buyout world, our current thinking is it that the LP base at the final close will be mainly German, with a few European LPs coming in as well,” Boege said.

Institutional investors can make a minimum commitment to the fund of EUR 5m, according to the press release.

Investments
The fund expects to make around 25 primary fund investments, focusing on small- and mid-cap fund, Boege said. Equity tickets will begin at EUR 10m-15m, rising to EUR 20m-25m as the fundraise progresses. The focus of its underlying portfolio will be growth companies in the technology, healthcare and B2B services sectors, according to the press release.

Accoridng to Unquote Data, Golding's buyout strategy has previous made commitments to funds including Agilitas 2020 Private Equity Fund, Hg Mercury 9, Synova IV and Livingbridge Enterprise 3.

A secondaries component typically comprises around 10-15% of its buyout funds, while the co-investment exposure is expected to comprise 20-25%, Boege said.

The fund’s primary investments will be split 50:50 between Europe and the US, while its secondaries and co-investments will be weighted towards Europe, he added.

“We have seen a slowdown in our pipeline in high quality dealflow in co-investments,” Boege said. “But we’re not too concerned as we are not keen or under pressure to deploy in this environment.”

“On the secondaries side, the market is still going strong and there is not enough secondary capital out there to capture all the investment opportunities, which provides a great deal-making environment,” he said. “On the primary side, there are so many GPs raising at the moment, given how fast they deployed in the past and the emergence of new strategies from the same GPs. This means we have a huge amount of choice when it comes to primaries. We can be very selective, which is great, but there are will be also some hard decisions to be made to discontinue good relationships.”

People
Golding Capital – Daniel Boege (partner, head of buyout).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Funds
• Fund-of-funds
• DACH
• UK / Ireland
• Benelux
• Southern Europe
• France
• Germany
• Golding Capital Partners