Koinos Capital explores return to fundraising trail in 12-18 months

Valentina Caiazzo
25 January 2023

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Italian PE firm Koinos Capital could start fundraising for a new SME-focused fund in 12-18 months as it aims to have Fund I 70% deployed by the end of this year, Managing Partner Francesco Fumagalli told Unquote.

The GP could look to raise as much as EUR 200m, double the amount of its first vehicle, to invest in more, larger companies.

Fund I is expected to complete two platform deals by the end of this year, which would bring its deployment to 70%. Koinos is likely to make a decision about launching the second fund around that time, Fumagalli said.

The new vehicle, despite the larger size, would follow a similar strategy and seek the backing of the same investors as its predecessor.

The 2020-vintage, EUR 100m Fund I invests in majority stake in Italy-based businesses, generally pursuing a buy-and-build strategy, with the aim to make its portfolio companies leader in their niches. It targets family-owned companies with revenues in the EUR 10m-EUR 15m range, with a preference for owners willing to reinvest in their businesses and establish a collaboration to jointly execute the company's strategic plans, Fumagalli said. In terms of EBITDA, its sweet spot is in the EUR 4m-EUR 5m range, he added.

Portfolio management
Fund I has three companies in its portfolio, all acquired between 2021 and 2022. Most recently, it acquired a majority stake in Rosa Ermando, an Italian specialist in the design and manufacture of tangential grinding machines, for which it could look to acquire in order to expand its offering and geographic footprint. The EUR 20m-turnover company plans to grow in the DACH region and is looking at local add-ons to accelerate this process and grow its distribution network. It is evaluating Italian companies in areas adjacent to its core grinding-machine production focus, as well as grinding machine upper sale services providers, Marco Morgese, a partner at Koinos, previously told Mergermarket.

Tre Zeta Group, an Italian manufacturer of shoe soles for luxury brands acquired in 2021, has been growing its production specialties via strategic add-ons, including two acquisitions in Italy: Suolificio Magonio and Stil Stampi. The company is on acquisition mode and is assessing targets among producers of polyurethane and ethylene vinyl acetate (EVA) for shoe soles, aiming to close one or more deals this year, as previously reported by Mergermarket.

Platum is Koinos' third portfolio company. The EUR 60m-turnover Italian specialist in electrical mobility was jointly acquired by Koinos Capital and private equity investor HAT. Platum plans to grow via the expansion of its proprietary brand, which accounts for one third of its revenue, and via licensing agreements with operators of Italy's motor valley, such as Ducati and Aprilia, Fumagalli said. No acquisitions are currently planned for this asset, he said.

Koinos' investments are all too recent for the firm to consider exit options, he noted, adding that its focus will be on growing portfolio companies rather than exiting them, which will become a topic more in the medium term.