Gradiente holds €135m final close for second fund

The fund is larger than its predecessor, Gradiente I, which held a final close in September 2012 on €76m.

Elm Capital acted as the exclusive global placement agent for Gradiente II.

The fund has already completed two investments: the purchase of metal components producer HPF and the acquisition of an 80% stake in fridges manufacturer Cold Line. Unquote understands that the vehicle is around 20% deployed so far.

Investors
Gradiente II's LP base is composed of a diversified mix of Italian, European and US investors, primarily funds-of-funds, pension funds, insurance companies, banks and family offices. One of the largest commitments came from the European Investment Fund (EIF), while Italian state-backed Fondo Italiano d'Investimento (FII), which committed €20m in Gradiente I in 2012, did not invest in this second vehicle. Apart from FII, all the investors in the previous vehicle re-upped to Gradiente II.

Furthermore, 65% of the capital raised came from European and US LPs, while the remainder came from Italian investors. This is a noticeable increase compared to Gradiente I, which only raised 20% of its commitments from outside Italy.

Investments
Gradiente II acquires majority stakes in lower-mid-market, Italy-based businesses with high-growth potential, generating EBITDA between €2-6m and with revenues in the €15-40m range. The vehicle makes investments of around €10m with a focus on the manufacturing and food sectors. In addition, it plans to pursue an intense buy-and-build strategy in order to support its portfolio companies' growth. The fund will use moderate leverage of up to 3x EBITDA and usually apply a 1:1 debt-to-equity ratio.

People
Gradiente – Pietro Busnardo (CEO).

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