MCH holds €200m first close for fifth private equity fund

The fund was launched in 2019 with a €400m target to invest in mid-sized companies headquartered in the Iberian peninsula.

"Despite the coronavirus emergency, our fundraising is proceeding at a good speed and we have already raised half of the total fund's capital," José María Muñoz, founding partner of MCH Private Equity, told Unquote. "However, some discussions with LPs have been put on hold and we expect our fundraising to continue at a slower pace in the coming months. This will probably result in a postponement of our final close, which was originally planned for the end of the year."

MCH Iberian Capital Fund V will be larger than its predecessor, which was launched in 2016 and held a final close in May 2017 on €350m, surpassing its initial €300m target.

"Half of our portfolio has not been affected by the crisis and is operating as usual," said Muñoz. "We expect a widespread effect across numerous industries and are strongly supporting the companies in our portfolio that are suffering from the emergency with cash management and financing plans, to make sure that they have all they need to recover quickly and efficiently from the crisis."

MCH also manages, in partnership with AlpInvest Partners, a €180m fund-of-funds named MCH Global Buyout Strategies, which targets European and American funds operating in the mid-market.

In addition, the GP manages SOPEF, a €200m vehicle launched in October 2018 with the aim of supporting the international development of Spanish businesses. The fund is a joint venture between Spanish state-backed Compañía Española de Financiación al Desarrollo (Cofides) and the State General Reserve Fund of Oman.

Investors
MCH Iberian Capital Fund V has already received commitments from French GP Eurazeo, which has recently bought a 25% stake in the Spanish GP. Following this transaction, MCH will be able to benefit from Eurazeo PME's LP base and connections.

In addition, most of the investors that backed MCH's fourth fund – which include both Spanish and international institutional investors, funds-of-funds and family offices – are expected to re-up in this latest vehicle.

Investments
The fund invests in mid-market companies based in Spain and Portugal, generating EBITDA of €5-15m. It deploys equity tickets in the €20-50m range.

The fund is in negotiations to acquire two Spanish companies operating in the food industry, which are not expected to be badly hit by the crisis, and might close these two deals by the end of the summer, the GP told Unquote.

"We are going through with our negotiations, but we intend to be very cautious in selecting our new deals and finding targets resilient in a possible recession," said Muñoz. "Furthermore, we expect some interesting opportunities for private equity funds to arise in the aftermath of the crisis, especially in certain sectors that will require recapitalisation."

People
MCH Private Equity – José María Muñoz (founding partner).

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