Sherpa Special Situations III closes on €120m

The fund is larger than its predecessor, Sherpa Capital II, which closed on €100m in 2014. The vehicle targeted Spanish lower-mid-market distressed companies active across all sectors, with a special focus on the industrial, wholesale, distribution, food, services, transport, logistics, leisure and tourism industries.

Sherpa has also raised a co-investment vehicle that will enable the firm to complete considerably larger transactions in partnership with its LPs, adding significant investment capacity and covering a much broader segment of the Iberian market.

Sherpa founding partner Eduardo Navarro said: "With Sherpa Special Situations III and our new co-investment vehicle, we will be able to invest in the numerous special situation opportunities that will become available after the coronavirus pandemic in all segments of the market, including larger companies that have typically been outside our investment scope."

In addition to its special situation range of vehicles, Sherpa also manages Sherpa Capital Private Equity, a fund dedicated to profitable companies based in Iberia. The vehicle closed on €150m in May 2018, exceeding its €125m target. It invests in small and medium-sized Spanish and Portuguese companies with EBITDA of €1-5m, and deploys equity tickets in the €5-25m range.

With the closing of this fourth vehicle, Sherpa reached €500m in assets manged through its special situation and private equity funds. The firm has made eight new hires in the last six months, reinforcing its team, which is now composed of 32 professionals.

Investors
Most of the LPs from the firm's previous vehicles re-upped to this new fund. Around 75% of the capital was committed by institutional investors from Europe and North America.

Navarro said: "Our fundraising began and concluded in just a few weeks. This was possible thanks to the track record of the firm, which has historically generated above-market returns."

Investments
Sherpa Special Situations III will target companies in distress following the current economic environment triggered by the pandemic or as a result of strategic, operational, financial or shareholding transformations and special situations.

The fund plans to make 8-10 investments, writing tickets in the €10-25m range in companies operating across a wide variety of sectors, with turnover of €20-300m.

The vehicle intends to target a broad and flexible spectrum of potential deals. It will invest in family businesses, divestitures and carve-outs of large groups and companies going through insolvency or bankruptcy proceedings. It can also make debt investments in loan-to-own transactions.

"As a result of the current situation, the number of companies looking for a partner like us has increased significantly," said Jorge Fernández Miret, partner of Sherpa. "We have already identified several very interesting investment opportunities, and we expect to complete a number of transactions with our new fund throughout 2020."

People
Sherpa Capital – Eduardo Navarro (founding partner); Jorge Fernández Miret (partner).

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