HIG European Capital Partners III sets target on €1bn

Alessia Argentieri
11 September 2020

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HIG Capital has set the target for its new fund HIG European Capital Partners III on тЌ1bn, Unquote understands.

The vehicle started fundraising at the beginning of July. It will invest in buyouts, recapitalisations and corporate carve-outs of both profitable and underperforming manufacturing, and service mid-market businesses based across Europe, with a special focus on southern Europe and the DACH region.

In addition, the GP registered a new vehicle in February, HIG Europe Middle Market LBO Fund, which is currently fundraising with a target of €2bn.

The fund is expected to follow the same strategy as its predecessors, investing in mid-market underperforming companies across Europe that require backing in the distressed, stressed and turnaround stages. LPs in the fund include OCERS and TCDRS, among others.

HIG is also managing the portfolio of HIG European Capital Partners II (HECP II), which closed on €825m in July 2013, exceeding its €760m target after just three months on the road. The vehicle has recently invested in DGS, an Italian IT company specialising in cybersecurity and digital transformation, generating annual revenues of around €115m.

The fund's portfolio also includes Project Informatica, an Italian company providing IT services, as well as hardware and software, that generates revenues of around €130m; Spanish gin producer Puerto de Indias, bought in February 2018; Italian labels manufacturer Cadica, bought from private equity firm Gradiente in May 2019; Plixxen, which was established following the carve-out of the European polyurethane business of German polymer specialist Covestro in June 2019; Italy-based Metalprint, a manufacturer of brass and aluminium industrial components, acquired in July 2019, and which generates revenues of around €70m; and French sports media agency Sportfive, created after the carve-out of Lagardère Sports from media conglomerate Lagardère in December 2019.

Alongside its European business, led by HIG Europe, the firm is also currently investing from Growth Buyout Equity Fund III, which closed on $970m in October 2018 and targets mostly North American businesses, but also considers some European opportunities.

Headquartered in Miami, with European offices in London, Hamburg, Madrid, Milan and Paris, HIG has around €34bn in capital under management and a portfolio that currently includes more than 100 companies with combined sales in excess of €27bn.

In addition to its equity strategy, HIG also manages its WhiteHorse credit affiliate, which provides flexible debt financing to mid-market companies based in Europe and the US. The firm offers unitranche, senior and subordinated debt for refinancing, growth capital operations, acquisitions, buyouts and balance sheet recapitalisations. Credit facilities typically range between €10m and €75m for companies generating revenues of more than €40m.