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Investindustrial's EUR1bn close latest sign of LP appetite

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Veteran Southern European buyout house Investindustrial, has reached the final close of its fourth vehicle, Investindustrial IV LP at EUR1bn, EUR200m above target.

The fund was raised in an impressive three months with the majority (65%) of the commitments originating in Europe and the remainder in North America (25%) and Asia (10%). The fund will target buy-and-build buyouts in the Southern European market with the flexibility to invest in the rest of Europe.

The fund's industrially-driven value-adding strategy, is supported by its regional presence which allows it to spread investment risks geographically; applying 'size agnosticism' at a country level with sector focus at a regional level. The fund will target companies with an enterprise value of up to EUR500m, thus tapping into a segment of the regional market (EUR500m+ funds) where the competition from local operators is still limited: N+1, Mercapital and Magnum in Spain.

But Investindustrial is not the only GP to find fundraising success. Although investors are perhaps more cautious than in previous years, in Spain, newcomer Magnum closed its first vehicle at EUR866m, with veteran N+1 closing at EUR500m. In Italy, Efigestioni has launched Efilog Private Equity, a fund solely dedicated to logistics and maritime-related projects.

There is indeed an overall belief that the lower and middle mid-market remain healthy and will foster significant investment opportunities in the months to come (page 14).

2008 has started well for seasoned and new players, a trend that perhaps follows from last year which saw fundraising in the Southern European region reach a new high, supporting the idea that LP appetite is on the high in spite of or maybe because of current market conditions.

According to unquote's proprietary database Private Equity Insight, fundraising in 2007 has increase significantly from the funds raised in 2006 exceeding the highest figure reported until then, close to EUR3.3bn recorded in 2000.

In this sense 2007 raised more than three times the EUR1.03bn raised in 2006. In total 2007 saw EUR3.57bn announced in regional and generalist funds with close to EUR3.77bn raised. Italy and Spain take the lead ahead of Greece and Portugal, with EUR1.9bn and EUR1.3bn raised respectively.