Initiative & Finance has held a final close for its third small-cap-focused fund, Initiative & Finance FPCI III, on its €200m hard-cap after less than three months on the road.
The vehicle is larger than its predecessor, FPCI II, which closed on €165m in 2015.
The GP also announced the launch of a new vehicle to invest in the mid-market, Tomorrow Private Equity Fund, which will have a target of more than €300m.
The fund will invest in companies active in various sectors, with a focus on pursuing environmental transition, solving environmental issues and developing solutions to address the global challenges set by the UN Sustainable Development Goals.
Tomorrow Private Equity Fund will acquire majority and minority stakes in mid-cap companies, mainly based in France, while not excluding investments also in the rest of continental Europe. It will target buyout and growth capital transactions and deploy equity tickets of €20-50m.
The fund will also pursue an impact investment approach, supporting the management of its portfolio companies in making extensive use of digital and data tools to transform the company business model.
The fund's strategy will be directed by Baudouin d'Hérouville, who joined Initiative & Finance as partner and head of mid-cap. He has 17 years of private capital investment experience across the European markets, working on both majority and minority deals. Prior to joining Initiative & Finance, d'Hérouville worked for 15 years at Ardian where he was managing director of the mid-cap expansion team.
Initiative & Finance FPCI III was considerably oversubscribed and exceeded its initial target, receiving strong support from previous investors and new LPs, according to the GP. Around 40-45% of commitments came from international investors.
Most of the LPs from the firm's previous fund re-upped to this new vehicle, including BPI France, the European Investment Fund, Ardian, Idinvest Partners, LGT Capital Partners, Access Capital Partners and CNP Assurance. In addition, the vehicle attracted several new international investors from the rest of Europe, particularly from Germany.
The fund prioritises buyout transactions, but dedicates some of its capital to growth investments as well. It deploys equity tickets in the €5-15m bracket, co-investing with LPs for larger tickets of up to €20m.
The vehicle targets companies valued at €5-50m when acquiring majority stakes, and assets with EVs of up to €80m for minority investments.
FPCI III has already made one investment by acquiring a minority stake in Rondot, a Switzerland-based manufacturer of mechanical and electronic equipment for the glass manufacturing industry.
Sale process saw EBITDA adjustments due to the hygiene product company's increased revenues
Company has raised more than €50m in funding so far.
Holdco plans to file a proposed public buyout offer with French regulator AMF at €90 per share
Submission proposes a bridge funding facility in the form of a convertible loan of up to £5m per company