EMZ 9 closes on €1.04bn

Katharine Hidalgo
09 July 2020

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EMZ 9 has held a final close on €1.043bn.

The fund held a first close in June 2019. "We had most of the fund committed in 2019," said Carré. "We were just waiting for a few LPs, which is why we held the final close in 2020."

The fund's predecessor, EMZ 8, closed on €815m in December 2017. The fund was fully deployed by December 2019.

Carré said: "We've never had the strategy of increasing the fund size too much. We'd prefer to come back to market sooner following a successful deployment of the fund. This fund is 20% larger than its predecessor, which in turn, is 20% larger than EMZ 7. We think it is regular, sensible growth."

Carré told Unquote that the fund's management fee, carry and hurdle rates were in accordance with market standards.

The fund is structured as a Société de Libre Partenariat and is domiciled in France.

The firm has also recently opened its first international office in Munich, headed by partner Klaus Maurer, formerly of Silverfleet Capital and ICG.

Reach Capital acted as placement agent and Goodwin provided legal advice.

Investors
Approximately four fifths of the firm's existing LPs re-upped in this fund, with about 40 LPs in total. The investors were mainly from continental Europe, mostly Germany and France, with one Asian investor.

Carré said: "Our LPs consist mostly of a mix of insurance companies and pension funds with a limited bucket for large, almost institutional family offices, though there are very few of those involved." He told Unquote the GP commitment was 2% of the fund.

The European Investment Fund provided a €60m commitment to EMZ 8.

Investments
EMZ 9 has already invested in seven companies, with 30% of the fund deployed. Investments include animal health company Ceva, road transportation company Jacy Perrenot, and ventilation equipment specialist France Air. The firm has three or four deals in the pipeline.

Carré told Unquote that the investment strategy would be the same as predecessor funds. "We offer flexible capital through both preferred and ordinary equity and bond financing to allow management teams to consolidate their equity position."

He continued: "We like to invest in companies where the family is well invested and we avoid financing very big cash-outs of big investors. We like situations where the cash-out is limited and we prefer financing growth in some way, either capex growth or acquisitions."

"Previously, 90% of our investments have been headquartered in France," said Carré. "The main difference between these funds and the previous vehicles is that we've now opened in Germany, we're building up a team there and we hope to be successful in that region."

The fund will typically write equity cheques of €50m per investment, though Carré said: "We have a very broad spectrum of potential investments that we can make. We can write cheques as low as €10m up to more than €100m. We generally do this through successive rounds of investment in portfolio companies of small cheques." The firm often makes three to five successive rounds of investment.

People
EMZ Partners – Thierry Raiff (chairman); François Carré (managing partner).