Astorg gears up for EUR 6.5bn close for Fund VIII next year

Astorg VIII was launched late last year with the GP now pitching the strategy to LPs, including existing investors, he said. The fund has received a “good level” of re-ups so far, he added.

Astorg will also be looking to tap up the retail market and high-net-worth individuals markets – a responsibility that Raby, who joined in May, will oversee, he said. Raby was previously CEO of Natixis Investment Managers and head of asset and wealth Management for Natixis, among other companies and roles.

“Progress on retail and HNWI distribution are early days,” he said. “Historically, we’ve worked with family offices, but they make up a minority share of our LPs.”

Its existing LPs are mostly European, although not French-centric, he said, noting that one third of its LPs make up are from US institutions and 15% from Asian investors.

Among LPs in its seventh fund include US-based Teachers’ Retirement System of the State of Illinois, New York State Teachers' Retirement System, as well as France-based Societe Fonciere, Financiere et de Participations and Switzerland-based Pictet Alternative Advisors, among others, according to Unquote data.

The fundraising effort coincides with the close of its EUR 1.3bn mid-market fund earlier this year.

Investments
The Paris-based investor has been busy deploying capital for Fund VIII with four investments announced so far. Among the most significant is the GBP 1.7bn takeover of Euromoney, a UK-based financial news and information business, alongside sponsor peer Epiris. As part of the deal, Astorg will take control of the Fastmarkets unit, which provides price benchmarking and analysis of commodities markets.

While the new flagship fund is expected to be around a third larger than its predecessor, its strategy of investing primarily in B2B businesses across healthcare, technology, industrials and business services will not swerve, said Nicolas Marien, investment partner at Astorg.

Fund VIII is able to provide companies with equity cheques of between EUR 400m-600m across 10-12 companies. Its co-investment capabilities will also allow Astorg to target larger companies, Marien said.

Businesses it typically targets are those which are leaders in their sector, very profitable, with EBITDA margins of around 30%, and high cash conversion rate, he said. It also prefers companies that are able to generate their own growth by their innovation or market penetration, regardless of GDP cycles, Marien added.

“Despite a more challenging environment we want to continue to deploy capital, we want to continue to look at deals… as far as those deals are in line with our investment strategy across industrials, services, tech, and healthcare, which has proven historically to be quite resilient and capable of generating attractive returns across the economic cycle,” Marien said.

With heightened competition for B2B businesses within the M&A market, Astorg typically tries to make itself known to management teams well before any sale processes, allowing it to develop an angle on the business, Marien said.

“This leads to a narrow, targeting exercise in our pipeline, developing a high conviction early on,” Marien said. “When we approach a company, we may have spent a year and a half to two years looking at the target and developing a conviction. That makes for a very powerful conversation with the CEOs and their shareholders.”

Exits
Among Astorg’s latest exits are Autoform, a Swiss engineering software for sheet metal forming simulation, sold to Carlyle in a deal reportedly valued at EUR 1.75bn. It also exited HRA Pharma, a consumer self-care company, to Irish pharma group Perrigo last year for EUR 1.8bn

Meanwhile, Astorg has moved IQ-EQ, a Luxembourg-based fund services provider, into a continuation fund.

“We are very disciplined. When you look at our portfolio today, we have no ‘bottom of the barrel’ portfolio companies," said Raby.

“Some of our peers drag a portfolio company for 12-13-14 years. That's not our case,” he said. “In Astorg, our oldest investment is Echosens invested in 2018,” he said. “Our job is to monetize at some point. We are disciplined in deal activity. So we'll continue exiting.”

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

• Topics
• Funds
• Buyout
• France
• Fundraising
• Astorg Partners