Quadrivio to capitalise on baby boomers as it nears wrap for its new EUR 300m fund

Launched in April 2021, the fund has secured EUR 200m so far and is looking to reach its EUR 300m target within the next six to 10 months, partner Stefano Malagoli told Unquote.

It completed its second investment last week after acquiring the UK medical cosmetic treatments provider The Private Clinic (TPC) from BlueGem Capital Partners, according to an announcement.

The private clinics network fits into the fund's investment thesis focused on healthy longevity of people over the age of 50, an active and fast-growing demographic in Europe and the US, said the partner.

Quadrivio's Silver Economy Fund will invest across Europe and the US in companies that offer products and services to the over-50s. With more spending power and a more active lifestyle compared to previous generations, this part of the population has been supporting the growth of the longevity market for products and services, Malagoli said.

The fund deploys tickets between EUR 20m-50m in small and medium companies of EUR 30m-80m enterprise value (EV), said Malagoli. It is seeking to make between seven to 10 investments in total with a focus on buy-and-build stories, he said.

With a rich pipeline of deals underway, the fund is currently looking to complete two more acquisitions by year end, in Italy and the US respectively, he added.

The fund focuses on physical wellbeing, recreation, home care, highly specialised clinical and diagnostic services, as well as medical devices.

Quadrivio − which also manages dedicated funds for the consumer and technology sectors − is among several PE firms turning to more specialist funds to pique the interest of LPs. In recent months EQT closed a EUR 260m dementia-focused fund via its life sciences arm, while Bain Capital closed its inaugural insurance-focused fund on USD 1.15bn.

First investments

The acquisition of TPC – fund's second investment - was structured as a leveraged buy-out financed by OakNorth Bank and included the add-on acquisitions of four clinics specialized in cosmetic medicine as part of the deal. The bank provided a GBP 14.3m loan to the firm, as reported.

Looking ahead, the growth journey of the business is set to include M&A, said Malagoli, noting that diversification in skin treatments is also planned.

The investment will also boost TPC's development organically, while further strengthening its position in the UK and abroad. The business model could also be duplicated in Italy and Europe, regions with high degree of fragmentation in these services, according to the press release.

The group is expected to have more than GBP 30m turnover in 2023, with half the revenues coming from non-invasive skin treatments, followed by plastic surgery, liposuction, hair treatments and those for varicose veins and bunions, it said.

Prior to the investment in TPC, the fund's first investment was Italian maker of electromedical equipment for anaesthesia and resuscitation SIARE in May.

Quadrivio's Industry 4.0, which invests in digital transition and technological innovation for SMEs is now fully deployed, as reported, while the firm's consumer-focused vehicle, Lifestyle Fund II, is on the road with a EUR 500m target.

Company
Founded 40 years ago in London, TPC provides medical cosmetic treatments across seven clinics and one hospital. Its flagship clinic in Harley Street, London performs all types of treatments provided by the group but focuses on plastic surgery. In London the group also operates the Devonshire Clinic. In addition, it owns a clinic n Stoke Poges −a village to the west of London− as well as the Fitzroy hospital. It also operates four more clinics in the UK, namely in Northampton, Birmingham, Leeds and Manchester. 

People
Quadrivio − Stefano Malagoli (partner at Silver Economy Fund), Wael Ballouk (investment manager), Alessandro Binello (group CEO).
The Private Clinic − Valentina Petrone (CEO).
OakNorth Bank − Stuart Blair (director of debt finance).

Advisers
Equity − King & Wood Mallesons Barri Mendelsohn, Jenny Willcock and Jonathan Forrest (legal); BDO Sam Boundy, Will Searle and Andrew Howson (accounting and tax); MDW Capital Partners LLP David Culpan and Giorgio Raimondi (debt advisory); LifeSciences Consultants Fabio Lotto (business due diligence).
Vendor − DLA Piper Piero Carbone, Harriet Brooker and Tom Morris (legal); Grant Thornton Hemal Shah and Michael Gilmore (accounting and tax); Lincoln International Harry Kalmanowicz, Matthew Lee and Tom Cunningham (corporate finance).
Debt − Jones Day Lee Federman (legal).

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