Afinum holds final close for fourth buyout fund

Afinum's new fund has standard market terms, management fees and carry. It is established as a limited partnership domiciled in Munich.

The fund was launched in December 2012 and closed in April 2013. The lifespan is 10 years plus two one-year extensions.

Incoming subscriptions consisted of €400m, although the hard-cap was set at €280m and the GP had an initial €250m target. The hard-cap was self-imposed by Afinum in order to stay within the mid-market.

The GP will have the possibility to embark on a new fundraising effort when 75% of overall commitments are called. Around 80% will be used for new investments while 15-20% will be held back for add-on rounds.

Afinum has been an active investor in the mid-cap segment since 2000, raising and investing three buyout funds to date.

Afinum's third buyout fund, Afinum Fünfte Beteiligungsgesellschaft mbH & Co KG, a 2007 vintage fund with commitments of €230m, is almost fully invested and management anticipates some smaller add-on acquisitions during the rest of its lifespan.

Afinum's two previous buyout funds, a 2000 vintage with commitments of €94m and a 2003 vintage with commitments of €140m, have been fully realised.

Investors
Afinum received re-ups from more than 85% of its existing investor base for the new fund and witnessed an inflow of new investors, which led to the oversubscription.

The fund received commitements from 66 LPs overall, including 10 investors new to Afinum. Pension funds and insurance companies made up 40% of the LP base, while funds-of-funds accounted for 30%, with private investors and family offices making up the remaining 30%.

Most investors are based in Germany (in excess of 40%), 20% hail from Switzerland, 15% come from the US, more than 10% are based in the UK and 5% come from Sweden. Locations such as France and Asia account for the remainder.

Investments
The new fund will follow a strategy similar to Afinum's previous efforts. The GP will target mid-market businesses in the DACH region, with a turnover typically in the region of €25-150m.

Target companies are typically owner-run businesses dealing with succession issues, notably in cases where the owner wants to step down.

Equity tickets will sit in the €10-35m range, with a sweet spot at around €20-25m. The fund will make 2-3 investments per year and 12-13 in total.

People
Thomas Bühler and Gernot Eisinger are founders and managing partners of Afinum.

Advisers
P+P Pöllath + Partners, Amos Veith, Stephan Schade (Legal, tax).

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