Investindustrial closes seventh buyout fund on €3.75bn

The fund is larger than its predecessor, Investindustrial VI, which closed on its €2bn hard-cap in February 2016. The fund is currently around 87% invested across 10 companies and intends to use its remaining capital only for follow-on deals, Unquote understands.

In addition, Investindustrial closed its lower-mid-market fund, Investindustrial Growth, on its €375m hard-cap in May 2018, after less than three months on the road. The vehicle focuses on smaller-scale deals, allowing the firm to cover the entire mid-market and to consolidate its position in southern Europe.

Lazard acted as placement agent on the fundraise.

Investors
Investindustrial VII is understood to have been oversubscribed on the back of significant interest from existing investors who re-upped from Investindustrial VI. Its LP base is composed of pension funds, insurance companies (primarily from Europe), sovereign wealth funds, funds-of-funds, endowments and family offices (primarily from the US and Asia). Half of the capital comes from Europe (around 10% from Italy), 40% from the US and 10% from Asia and the Middle East.

Unquote understands that the fund's LP base includes several Nordic pension funds, such as the Danish ATP pension fund and the Swedish pension fund AP2, as well as a number of North American institutional investors, including the State of Wisconsin Investment Board, which deployed around €75m, the Florida State Board of Administration, which committed around €70m, and the Employees Retirement System of Texas, with €50m. The founding Bonomi family and the management team also invested in the new vehicle.

Unquote understands that the fund is planning to make its first deal in the next three months.

Investments
Investindustrial VII targets controlling stakes in European companies operating in the consumer goods, industrial and healthcare services sectors. It plans to make 10-12 deals and cover the entire mid-market by investing in both lower-mid-market businesses with enterprise values of less than €200m and, for a smaller number of deals, by targeting larger companies at the upper end of the market, with EV in excess of €500m.

It will deploy equity tickets in the €50-100m range for its lower-mid-market deals and of around €350m for its larger deals. It will also co-invest with LPs for larger and selective mid-market opportunities.

The fund will invest its capital primarily in southern Europe, with additional selective deals in niche sectors across other European countries. It will apply moderate leverage of 4x EBITDA on average.

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