Keensight closes fifth fund on €1bn hard-cap

Announced in Q3 2018, the fund was marketed for only four months before hitting its hard-cap.

Keensight managing partner Jean-Michel Beghin said: "A proven track-record, a very clear and differentiated strategy and the will to create value from growth rather than leverage have been key points in attracting new LPs to the fund (about 60% of the investor base) and closing the vehicle swiftly."

The vehicle is significantly larger than predecessor Keensight Capital IV, which closed on €450m in 2015. The fund deployed its capital on several occasions using co-investments. Together with partnering GPs, Keensight has deployed more than €1bn via the fourth-generation vehicle. With the latest fundraise of €1bn, the GP is expecting to do fewer co-investments, due to the possibility of providing larger tickets, Beghin disclosed to Unquote.

Paris-headquartered Keensight was founded 20 years ago. Since then, the team has invested in 52 companies and completed 37 exits, generating an overall gross IRR of 39% and an average gross multiple of 2.8x, according to a statement by the firm. Keensight's portfolio companies have achieved an average sales annual growth rate of 22% over the last five years and an average EBITDA margin of 26% in 2018.

The firm is currently in the process of hiring new staff.

Investors
The fund was substantially oversubscribed with strong support from existing LPs, as well as new investors from Europe, North America, the Middle East and Asia. "Attracting an international LP base was, for the first time, an important goal during the fundraising process, and this was facilitated with the help of the London and US-based placement agent Park Hill," said Beghin.

The fund's LP base for Keensight V is 90% composed of subscriptions from institutional investors (asset managers, pension funds, insurance companies, banks and sovereign wealth funds), and around 10% from former portfolio company CEOs and family offices.

Investments
With Keensight V, the GP will pursue its investment strategy of acquiring either minority or majority stakes in businesses related to the information technology and healthcare sectors in western Europe.

Portfolio companies will need to be generating revenues of between €15-250m. Keensight V will provide equity tickets of €20-200m.

Beghin said: "We are very careful about never making exceptions to out rigorous criteria when sourcing businesses: our backed companies need to operate innovative technology, grow annually by at least 10%, and have the potential to grow internationally or already be international. Moreover, even in the information technology and healthcare sectors, we like to specialise in sub-sectors. For example, we would invest in a medtech business and not in clinics. Sticking to these criteria allows us to select companies set out for long-term growth."

The firm's latest investments include France-based Ividata, a consulting group specialised in big data and AI services; and Spain-based Asti Mobile Robotics, a specialist in automated intralogistics products for large manufacturers.

People
Keensight Capital – Jean-Michel Beghin (managing partner).

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