Capza 5 Flex Equity Fund closes on €700m

Alessia Argentieri
10 May 2021

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French private investment firm Capza has held a final close for its Capza 5 Flex Equity Fund on €700m, exceeding its €500m target.

The fund is double the size of its predecessor, Capza 4 Flex Equity, which closed on €350m in October 2016.

Since its inception in 2004, the Capza Flex Equity team has led 80 deals combining equity and mezzanine, and has realised an average multiple of 1.97x, based on 54 completed transactions.

Capza manages €5bn in assets across six complementary strategies: flex equity, private debt, growth technology, expansion, transition, and senior loans (via its Artemid funds).

The firm recently held a final close for its unitranche fund Capza 5 Private Debt on €1.6bn, exceeding its initial target. The vehicle invests in SMEs with EBITDA of more than €12m, providing LBO financing, including unitranche, senior loans and mezzanine.

Following the rapid deployment of this vehicle, which is already 75% invested, Capza intends to start fundraising for a sixth private-debt vehicle by the end of 2021.

In addition, Capza has also launched a new strategy: a growth tech fund with a €250-300m target that will deploy tickets of €10-30m, providing growth equity and quasi-equity. The vehicle has collected around €140m so far. It targets profitable businesses with EBITDA of less than €5m and a sustainable level of sales, taking minority positions alongside managers and founders, with the aim of fuelling the development of companies operating in a wide range of segments across the technology industry.

Investors
Capza 5 Flex Equity attracted commitments from a broad pool of investors – primarily insurance companies, funds-of-funds, public institutions, pension funds and family offices.

Around 75-80% are institutional investors, while 20-25% are high-net-worth individuals and family offices. Its LP base includes the European Investment Fund, BPI France, Axa, German fund-of-funds Golding, and BNP Paribas, among others.

The fund recorded a re-up rate of 100% – with all LPs from Capza 4 Flex Equity joining the new fund's investor base – while also attracting several new French and international LPs.

Investments
Capza 5 Flex Equity offers flexible financing that combines majority and minority equity, convertible bonds and mezzanine.

The fund plans to complete 20-25 investments over a five-year investment period. Around 70-75% of the capital should be deployed as mezzanine, with the remainder invested as equity.

The vehicle targets small and mid-cap businesses with EBITDA in the €4-12m range and turnovers of up to €150m, based across France, Spain, Germany and Italy.

The fund specialises in offering tailor-made equity packages adapted to each company's specific needs, and aims to support its portfolio companies in their growth and build-up strategy across the lower-mid-cap market.

Capza 5 Flex Equity started to invest last September and has already backed six companies, deploying around 21% of its capital. It has invested in Spanish e-learning business IMF Business School; French IT education group Ynov; French digital transformation consultancy Magellan Partners; French manufacturer of medical beds Winncare; French B2B services company MT Systems; and Italian content management system developer EidosMedia, acquired from Hg.