Initiative & Finance eyes EUR 350m fund close 'as soon as possible'

The Paris-headquartered investor has so far raised more than half of the EUR 350m earmarked for the vehicle. Tomorrow Private Equity Fund began fundraising only "slightly less than a year ago" and the vehicle was established in 2020, according to Unquote Data.

LPs which have so far made commitments include the European Investment Fund, BPI France, LGT Capital Partners, Credit Agricole and family offices, he said.

"Our investor base is mainly European given that it was difficult to travel during the past months due to COVID-19," he said. "We are now seeking to extend our investor base more internationally now that it's easier to travel and to meet in person," he said.

Tomorrow, which targets businesses with between EUR 7m and EUR 25m in EBITDA and EUR 40m-250m in revenue across different sectors, marks a "natural move" from the sponsor's previous focus on small-cap investments, he said.

D'Hérouville, a founding partner of Ardian's expansion team, was poached in 2020 to help Initiative & Finance with the new fund.

The vehicle has so far made its first acquisition: Babymoov, a childcare equipment brand with an ambition to grow its product offering and expand geographically, especially in China, as reported by Mergermarket.

The deal is fitting to Tomorrow's investment thesis of targeting companies with ambitions to pursue environmental sustainability. Babymoov is looking to relocate some of its production back to France and Europe as part of its push to lower its carbon footprint. It also designs its products to ensure that they are fully repairable, in fitting with the circular economy trend.

The Tomorrow fund is expected to make two to three deals per year and will ultimately hold between 10 and 13 companies by the end of its five-year investment period, he said. It will target businesses mainly in France, but will also consider opportunities in Benelux, Italy, Germany, and potentially Spain and Portugal, he added.

Buy-and-build will play a major role for growing its portfolio companies, although it will also build up their operations to help them with their environmental and digital transitions through manufacturing, logistics, management or other functions.

Initiative and Finance raised EUR 200m for its FPCI III fund in 2020. It made four exits in 2020 – banking software Isilis, packaging group Pure Trade Worldwide, security systems Azman Groupe Securite and transition management services provider Valtus.

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