Wise Equity closes sixth fund on EUR 400m, eyes Italian family-owned B2B targets

At a time when fundraising is slowing down, the firm managed to close its latest fund four months after its launch, the GP said in a statement.

Its latest fund is almost 50% larger than its predecessor. The successful fundraise is down in part to strong demand for its previously oversubscribed fifth fund, which sustained LP interest for its latest vehicle, Semenzato said.

“We had to offer to the LPs who wanted to invest in our fifth fund stakes that were way below their preferred allocation, which I believe now helped to secure commitments for our sixth fund,” he said.

Rede Partners acted as placement agent for the fundraise, while Legance-Avvocati Associati and Proskauer provided legal advice, according to the press release.

Wisequity V held a final close on its hard-cap of EUR 260m in July 2019, according to Unquote Data. It is now fully deployed across eight investments and made its first exit by partially realising its investment in Italian manufacturer of high-end bicycle tyres Vittoria in December 2022, according to a press release. The GP previously had a 90% stake in the business and now holds a 10% stake, he said.

The fundraise follows the firm's recent exits of Italian bottle-closures producer Tapi and Italian lighting towers manufacturer Trime in the last six months, which further supported the fundraising process, Semenzato added. The firm reaped an average of 4.3x money across its three latest exits, he said. This brings realised MOIC across Wisequity III, IV and V to 3.8x, according to the press release.

The firm has a strong exit pipeline in spite of the tough valuation environment, while continuing to strengthen the performance and growth of its portfolio companies amid inflationary headwinds, he said.

In addition to its fresh fundraise, it has announced a series of new hires and organisational changes, according to the press release.

At a senior level, Luigi Vagnozzi has been promoted as the sixth senior partner of the company and has joined the board of directors together with Elvira Viviani, the company’s CFO, and Alberto Picciau as an independent member. Vagnozzi and Viviani will also join the other five senior partners in becoming shareholders of Wise Equity SGR, which will continue to be fully owned by its management team.

Investors
The GP attracted significant commitments from existing investors with a 128% re-up rate on capital, as well as commitments from new institutional investors, according to the press release.

“We had a very limited number of no-reups, which we substituted with a number of new investors with which we have long-term relationships and who are largely international,” he said, noting that all returning investors have increased their stake by 50%-100%.

International institutional investors represent more than 60% of the commitments, while Italian LPs represent 28%, with the remainder coming from high net-worth individuals and the Wise Equity team, according to the press release.

The largest new investors in the fund are from the Netherlands and Switzerland, said Semenzato.

Investments
Wisequity VI will largely continue the strategy of its predecessor vehicle, investing in Italian family-owned companies that operate in niche B2B sectors, including machinery and manufacturing.

It will focus on lower and mid-market businesses with enterprise values (EVs) EUR 20m-EUR 70m. It will increase the number of platform investments that it will make from eight to around 12, given the fund’s larger size. The firm plans to deploy EUR 20m-EUR 40m per transaction from its sixth fund.

Its average entry debt level per deal is 1.5x EBITDA and is looking to make a mix of full equity acquisitions and LBOs, in which case the firm tends to leverage a business no more than 2.5x, said Semenzato.

He said that 80% of the revenues of its portfolio companies across its last two funds were generated from international markets as its companies are largely export-oriented. Its conservative approach when it comes to leverage has secured “very flexible balance sheets, which is very important at times of economic uncertainty,” he added.

A significant part of the sixth fund will be reserved for follow-on investments, he said. The GP typically dedicates 15% of each fund to follow ons and add-on acquisitions, he added.

People
Wise Equity – Michele Semenzato (founding partner).

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Fundraising
• Southern Europe
• Buyout
• Industrials
• Wise SGR
• Italy