Munich Private Equity closes Fund IV on EUR 392m

Harriet Matthews
15 December 2022

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Munich Private Equity Partners (MPEP), a lower mid-market and mid-cap fund-of-funds investor, has held a final close for its fourth fund on EUR 392m, managing directors Christopher BУЄr and Christian Moritz told Unquote.

Marketing for the fund began in October 2020 and ended in June 2022, the managing directors said. MPEP IV initially had a EUR 250m close but increased this at the start of 2022, they added.

MPEP IV held an interim close in April 2022 with around EUR 215m in commitments, as reported.

The GP closed its previous fund in July 2020 on EUR 162m, surpassing its EUR 100m target.

Although larger than its predecessor, the new fund has raised commitments appropriate to the firm's strategy, Bär told Unquote. "As a boutique, we have a strategy that is scalable to a certain point," he said. With around EUR 392m raised, the firm will have around EUR 200m to deploy "across the deepest and most mature PE markets in the world", namely Europe and North America. "That means can continue to be very selective by only slightly increasing the number of fund investments per year and rather adjusting our average commitments per manager," he said.

"We're planning to do more of the same with this fund," Moritz added. "A lot of it comes down to alignment – the more strategies you have, the harder it is to be focused and aligned. But we do one product in one asset class, which means that we are fully focused, and this resonates with our investors."

The firm said in a press release that its fund-of-funds programme has recorded an average gross multiple of 3,8x across 97 exits to date

Investors
With RWB Group as its cornerstone investor, MPEP IV has an LP base of pension funds, insurers, asset managers, foundations, single/multi-family offices, banks and endowments.

With its latest fund, the GP has also expanded its LP base to the Nordics and the Netherlands, Bär and Moritz said.

The fund's two separate vehicles, dedicated to Europe and North America respectively, allow LPs to structure their exposure to each geography on a flexible basis.

Investments
The fund will continue the strategy of the GP's previous vehicles, investing in lower mid-cap and mid-cap funds in Europe and North America. It will typically target funds of EUR 300m-1bn in size, but can selectively partner with small-cap EUR 100m-EUR 200m funds or larger funds of up to EUR 3bn, Bär and Moritz said.

MPEP IV expects to back 15-20 funds in each of its regions of investment. To date, the fund-of-funds has made commitments to 28 funds. It typically invests EUR 10m-EUR 15m per fund, as previously reported.

"The managers we target are often having single first and final closings, just adding a handful of new investors," Bär said. "For the investments we did over the last year, we have built relationships with gestation periods of seven years from first contact to partnering with a manager."

MPEP has previously invested in funds from managers including ECI Partners, PAI Partners and Argos Wityu, according to Unquote Data.

People
Munich Private Equity Partners – Christopher Bär, Christian Moritz (managing directors).