Investindustrial nears €1.25bn hard cap

Kimberly Romaine
13 April 2012

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Southern European GP Investindustrial is in the final stretch of raising its fifth fund, with more than €1bn in commitments already. Kimberly Romaine reports

Investindustrial has wooed investors to the tune of €1.25bn, a respectable 25% increase on its previous vehicle, according to sources familiar with the situation. PPMs were sent out in November.

Fund V is said to have had the support of all its major existing investors, which include Adveq, ATP, New York Life Insurance Company, Princeton University, Adams Street Partners, AlpInvest, AXA Private Equity and HarbourVest, according to unquote" data.

Some smaller investors are not re-upping, including Wilshire. Investindustrial commits around 10% to its funds, far more than is standard in most firms. It has decreased its management fee for this vehicle from 2% to 1.75%.

The impressive performance of the GP of late will also have helped convince investors: the firm is about to sell Ducati to Audi for nearly €900m, which would give it close to 3x money. Last year it sold Italian architectural and engineering business Permasteelisa to Japanese industrial buyer JS Group for €573m, corresponding to an IRR of 73% or 3x money for the backers. In December 2010, Investindustrial reaped a 3.6x multiple when it sold Italmatch Chemicals to a Chinese investor.

It has not purely focused on exits, though: last year, Investindustrial made three new investments, making it one of just four private equity houses in Europe to close more than one buyout, according to unquote" data.

Fund V, like Fund IV, will have around 40 LPs. The previous fund saw 65% of commitments come from Europe, with a quarter from the US and the remaining 10% from Asian LPs. Funds-of-funds represented just under a third of the LP base. According to unquote" data, investors are international rather than local in nature, indicating Investindustrial has been focusing its marketing efforts internationally.

Fund IV closed on €1bn in early 2008 and is currently invested in nine businesses. At just over 75% invested, Fund IV is likely to make one more investment.

Investindustrial was founded in 1990 and has a team of more than 50 people.

The source suggested a lack of local talent could help prospects for Investindustrial: "The Southern European market is less penetrated and therefore less competitive, unlike the Nordics, where a lot of groups out raising will make it very competitive. Southern Europe should be very attractive for the next vintage."

Investindustrial declined to comment.