Green Arrow holds €230.6m final close for third buyout fund

Alessia Argentieri
07 September 2018

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Green Arrow Capital has held a final close for its third buyout fund, Green Arrow Private Equity 3, on €230.6m.

The fund inherited the portfolio of Quadrivio Private Equity Fund 3 after Quadrivio was wholly acquired by Green Arrow in November 2017. The GP launched the fund with a €300m target and held a first close on €130m in December 2015, with an interim close held on €200m in August 2017.

Green Arrow Private Equity 3 is larger than its predecessor, Quadrivio Private Equity Fund 2, a €150m vehicle launched in 2008, which concluded its divestment activity in 2018 by selling its residual portfolio companies – Sebeto and Forno D'Asolo. According to the firm, the vehicle achieved a net IRR of 16% and a cash-on-cash multiple on invested capital of 2.3x.

The Green Arrow Private Equity 3 investment team is led by director Nicola Pietralunga, supported by two senior investment managers, Francesca Gennaro and Roberto Giudici, and investment associate Luca Chiabrera.

Unquote reported in July that Green Arrow expects to hold a close for its lending vehicle Quadrivio Private Debt Fund on up to €175m by the end of October. The GP launched the fund in 2016 with a €250m target and held a first close on €120m in December 2016.

In addition, Green Arrow announced in June the launch of two new vehicles, a €200m fund called Special Credit Situations, which will be on the road by the end of the year, and a €500-700m fund named Fondo Infrastrutture Energetiche, which will be launched at the beginning of 2019 to focus on energy infrastructure and renewables.

The GP told Unquote that it also plans to launch a new private equity fund in 2019, with a target of €250-300m.

Investors
The fund's LP base is mainly composed of pension funds, insurance companies, banks and funds-of-funds, which together committed 90% of the capital, such as Poste Vita, Fondazione Monteparma, Cassa Nazionale di Previdenza e Assistenza a Favore dei Dottori Commercialisti and Fondo Pensione BCC. The remaining 10% was committed by the management team, the firm itself and several high-net-worth individuals.

Investments
The vehicle acquires majority and controlling positions in Italian companies with an enterprise value of between €30–100m, revenues of €20-70m and EBITDA in excess of €7m. It will deploy equity tickets in the range of €10-30m.

The fund started its investment activity at the beginning of 2016 and has made three investments and two add-ons so far, deploying 46.5% of its capital.

The fund pursues buy-and-build strategies by targeting add-on acquisitions, mergers with competitors, and business combinations in order to support the expansion of its portfolio companies.