Equinox closes third fund on €360m

"Our fundraising was very smooth and wasn't affected by the coronavirus emergency," Equinox partner Angelo Facchinetti told Unquote. "We officially closed our fund at the end of April, but had collected most of the capital before the pandemic outburst. The fund has a perfect size for the Italian market, which will allow us to build a portfolio of mid-cap companies across a variety of sectors."

Equinox is a private equity firm launched in 2000. It is  headquartered in Lugano, Switzerland, and its funds are domiciled in Luxembourg. The GP raised €301m for its second vehicle, Equinox II, in 2016; the fund is now completely divested except for one company.

Facchinetti said: "Our strategy focuses on tailor-made deals, usually proprietary deals made in partnership with local entrepreneurs. We target companies with high-growth potential, and successful and attractive industrial projects, able to guarantee the growth and expansion of the business both in the local market and internationally."

Investors
Equinox III's LP base is mainly composed of Italian institutional investors, primarily pension funds, insurance companies and banks, including Unicredit and Banco BPM, as well as a large pool of Italian family offices and entrepreneurs. The fund also received a significant commitment from the European Investment Fund.

Investments
Equinox III targets Italian companies operating in the food, retail, technology and healthcare sectors, generating EBITDA of €4-20m and revenues in the €20-200m bracket.

It buys majority stakes, and qualified minority stakes of 25-40%, and deploys equity tickets in the €15-50m range, with the possibility to make co-investments with its LPs for larger deals. It usually applies moderate leverage of 2-4x and is very flexible in the debt financing provided for each transaction.

The fund has already made three investments: the acquisition of a 40% stake in sports clothing manufacturer Manifattura Valcismon in January 2019; the purchase of a 55% stake in Italian ICT specialist Quid Informatica in April 2019; and the acquisition of Italian jewellery designers and manufacturers Villa Pedemonte Atelier and Lombardi Vendorafa in June 2020.

Facchinetti said: "We have a large pool of capital to invest across the Italian mid-market, while managing only three companies in our portfolio. This allows us to focus on selecting the best opportunities available, instead of dedicating capital and time to the recovery of a large pre-existing portfolio."  

The GP told Unquote that it plans to make at least another investment by the end of the year, probably in the personal care sector.

"The crisis has badly affected certain sectors, but has also decreased valuations and created a less competitive environment," said Facchinetti. "With our know-how, we are confident that we will be able to find some excellent assets, led by competent managers with outstanding industrial projects and business plans, that need the support of a financial investor."

People
Equinox – Angelo Facchinetti (partner).

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