Edmond de Rothschild's Eres IV eyes second close in H1 2022

Edmond de Rothschild announced it raised EUR 300m for the first closing of Eres IV in early September. The firm and Eres managers Jean-François Felix and Jérémie Mélin set up Elyan Partners to serve as fund manager for Eres IV.

A second close, which would add to the pot up to EUR 150m and mostly attract institutional investors not belonging to Edmond de Rothschild's network, is expected sometime in H1 2022, Felix said.

In the meantime, Eres IV will start to deploy and conduct its first acquisitions – mostly minority stakes – between Q4 this year and Q1 2022, he added.

Assets targeted will be mid-cap companies operating in spaces including e-commerce, online financial services, new consumption habits, and biotech, Felix said, adding that Eres IV will invest EUR 15m-70m for each transaction. Enterprise values of target companies will range between EUR 100m and EUR 500m. The Eres fund will usually stay invested in assets for five years, according to Felix.

Partnership investment
The sweet spot for the average value of a transaction would stand at EUR 500m, and would mostly be co-investments with other minority sponsors, Felix said. Edmond de Rothschild deployed its previous mid-cap fund, Eres III, between 2016 and 2021; it secured minority stakes in 15 deals and worked with a total of 25 different co-investors.

Marking a departure from previous vintages in the strategy, Eres IV will also be used to secure majority acquisitions – set to represent one third of the deal volume expected, Felix said.

Elyan's managing partner said that the new fund will aim for an average of three to five transactions a year, but did not want to give details on the targets already identified. It will aim to complete 12-15 deals by 2026.

Eres IV will be exclusively dedicated to European and North American assets – which will account for respectively 60% and 40% of the fund. Unlike its predecessors, the fund will not invest outside these geographies. Last month, Edmond de Rothschild sold its minority stake in the assets of Fidelity Bank in Ghana for an undisclosed value, according to local press reports.

The last investment for Eres III was completed last April when the fund backed the acquisition of Lille-based wooden furniture manufacturer and online retailer Tikamoon by managers Arnaud Vanpoperinghe and Thibaut Deslorieux.

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