French private equity firm Azulis Capital has held a final close for its sixth fund, Middle Market Fund 6 (MMF 6), on EUR 280m.
The GP says MMF 6 will take minority or majority positions with tickets of EUR 10m-20m in high-growth companies valued at EUR 20m-120m.
The fund also has an underwriting capacity of up to EUR 50m in equity with the support of co-investing LPs.
Azulis partner Pierre Jourdain told Unquote that the fund will make around 15 investments, five or six a year, in four key sectors: health and personal services; food and beverages; business services; and new consumer.
The GP will look solely at France for the health and food sectors, but may look elsewhere for business services and consumer. It has the option to invest up to 20% of the fund capital outside of France for primary investments.
In healthcare, the fund is looking at services including clinics, elderly care homes, and home care.
MMF 6 is already 22% deployed, having invested in four companies in 2021 for an aggregate amount of EUR 60m. These deals were for vocational training provider Orsys; primary packaging distribution company Fidel Fillaud; natural personal products manufacturer La Phocéenne de Cosmétique; and a reinvestment in homecare services business Destia.
Jourdain said Azulis's MMF V fund did fully exit Destia when it sold to Siparex in September 2021, but the new majority owners brought back in co-investors, so MMF 6 took a less than 10% stake.
Azulis held a first close for MMF 6 in January 2021 on EUR 200m.
Its predecessor, MMF V, closed in April 2017 on EUR 215m. MMF V invested in health, agriculture, consumer, and business support services. It targeted businesses with EVs of EUR 15m-150m, providing equity tickets typically in the EUR 10m-15m range.
MMF V is now fully deployed and has about EUR 10m in dry powder left to help make add-on acquisitions.
Azulis also says the fund has a strong ESG angle. It has opted for Article 8 of the SFDR (Sustainable Finance Disclosure Regulations), meaning it has measurable objectives on environmental and social commitments.
Jourdain said the GP wants to help transform the impact of small-cap investments. "They still have a long route in terms of their ESG journey."
Azulis says that existing investors, institutional investors, family offices and owner-managers were all keen to invest. New institutional investors and private individuals have also subscribed to the fund. Around 15% of the fund is private individuals, including management of prior portfolio companies.
Jourdain said that around 85% of earlier investors reinvested in MMF 6. The split between old and new investors is 65/35.
The GP has invested roughly EUR 4.3m in the fund and it carries the usual management T&Cs.
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