Meanings primes second midcap fund for final close by Q2 2023

Meanings Private Equity Fund IV, which has a EUR 250m target and a EUR 300m hard-cap, has already secured half that amount in commitments, he said. Meanings is working with financial advisor Campbell Lutyens and plans to attract investors from outside France, he added.

The GP expects to complete the fundraise by March 2023 at the earliest, he said. A team of 10 employees will manage the fund, including a sustainability manager, he added.

Fund IV will carry out eight investments in healthcare, IT, education, business services and consumer services, with a first deal expected by H1 2023, Fonta said.

The vehicle will target companies located in France with a valuation of EUR 50m-EUR 150m, he said. Its average ticket will be between EUR 20m-EUR 60m, he said.

It will mainly invest in exchange for a majority stake or at least a significant minority stake, he said. It could carry out co-investments with its limited partners, he added.

Established in 2015 and owned by its employees, Meanings also has a small-cap investment strategy, Fonta said. Its small cap fund raised EUR 120m in 2021 and has already deployed a third of that amount in four deals, including French property development construction software publisher Kaliti last month.

Its average ticket is EUR 3m-EUR 15m and it will carry out four or five more deals in the next two years, he said.

The firm has 40 employees and EUR 1bn under management, he said.

Midcap focus
The vehicle follows Meanings’ first midcap fund, which was launched in 2015 and raised EUR 206m, with an additional EUR 45m deployed in co-investments, the founder said.

This first midcap fund targeted smaller companies valued at EUR 50m-EUR 100m and was entirely deployed by June 2022 with a total of six investments, including sterile medical packaging expert Sterimed; express delivery services provider Sterne; provider of transportation services for disabled children My Mobility; and iD Systemes, a publisher of management software for wine producers.

Its investors were mainly institutionals as well as a minority of family offices, he said. The second midcap fund will have a high re-up rate, he said, declining to give further details.

A majority of midcap deals that Meanings carries out are non-intermediated, he said. However, the firm does mandate financial advisors for its exits and typically works with French firms Natixis Partners, Alantra, Cambon and Bryan, Garnier & Co.

The sponsor targets returns of 2.5x money or above on average, Fonta said.

Hands-on approach
Meanings aims to source ahead of competitors potential targets operating in high growth sectors, he said. It has previously invested in cybersecurity, healthcare and building information modelling (BIM), he added.

The PE firm is specialised in situations with a high entrepreneurial risk, including companies with locked-up capital, carve-outs or spin-off, he added.

Meanings’ portfolio companies go through a business model transformation and internationalisation is one of the firm’s main objectives, he said. Each of its vehicles manages a limited number of companies, eight being the maximum number, in line with its hands-on approach, he added.

Sustainable investments
"Sustainability is a value-add factor for companies and sponsors alike," Fonta said. An ESG-compliant company has a higher potential for financial growth, he said.

The private equity firm's decarbonised strategy has been approved by the science-based targets initiative (SBTi), a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF) which promotes carbon emission reduction targets in the private sector, he said. Some of its portfolio companies also obtained the EcoVadis Platinum label, he added.

Meanings Capital’s management carried interest is also partly (25%) based on whether the firm achieves its ESG objectives, he said.


[Editor's note: Subsequent to publication, the article has been amended to clarify that Meaning's first small cap fund targeted smaller companies valued at EUR 50m-EUR 100m.]

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