Fremman considers return to market in 2024 following newly closed EUR 1bn debut fundraise

The target for its second mid-cap fund will be slightly larger than its first fund, Fremman I MM, which raised EUR 600m, alongside a further EUR 400m for its co-investment programme, he said.

“We anticipate that we will be back in the market in 2024 to raise our second fund,” said the former PAI Partners senior partner. “It'll be a slightly larger fund, which would allow us to maintain exactly the same strategy and same target companies. We wouldn't want to move out of where we think we have a key competitive advantage.”

Following two years on the fundraising trail for its first fund, Fremman was able to secure commitments from institutional investors, including pension funds, banks, insurers, fund-of-funds, and family offices from Europe, North America, Latin America and the Middle East, he said.

Talks of a second fund soon after its debut fund close come in part due to the strong demand for the GP’s strategy, as well as its advanced investment progress for the first fund, he said.

Since the final close several weeks ago, institutions with close to EUR 300m of capital have since followed up with the GP, he said.

“When the word got out that we were about to close, investors actually got much more interested,” he said. “I think a lot of them were waiting and sitting on the fence thinking there is value coming in at the last minute,”

“Eventually we did close when we got to our target and decided not to extend,” he said. “We had committed with our existing investors that we would close as soon as we hit the target, in particular, because there has already been a lot of value created in the portfolio, while the existing investors were less keen to share that value created with new investors who normally come in at cost.”

Fremman was pitching its strategy during what the co-founding partner said was one of the “most challenging” times for a debut fund, with the likes of pension funds needing to reduce exposure to private equity investments on the back of the denominator effect.

At the same time, larger and more established funds have been coming to the market for re-ups, sucking liquidity further, he added.

“It was difficult for many of our competitors to even get airtime unless you had a very differentiated and strong, solid story,” he said.

Advanced deployment
Fremman typically invests in companies involved in the business and tech services, healthcare, consumer goods and services, and industrials sectors, with a view to growing them from local champions to pan-European leaders, De Serdio said.

It has completed five platform investments to date, most recently UK-based clinical insourcing company Medinet.

The debut fund is expected to house eight to 10 companies eventually, with two more deals likely to be signed before year-end, followed by another handful of investments for next year, he said.

Bolt-ons have already played a significant part in the growth of its portfolio companies, most notably Kids Planet, which has completed more than 50 add-ons, equating to around 90 more sites for the UK nursery chain since its investment in 2021.

Similarly, Palex Medical, a Spanish distributor of high value-added medtech, as well as Spanish fruits grower and distributor The Natural Fruit Company, have made more than 10 bolt-ons each since Fremman’s investments in 2021, he said.

At least one exit is likely to take place before the second fund is launched, he said.

The GP sources its investments through its proprietary network via its presence in London, Madrid, Munich, Paris and Luxembourg, he said.

Fremman was founded in 2020 by four former PAI Partners partners, namely De Serdio, Mirko Meyer-Schönherr, Edward Chandler and Olivier de Vregille.

Its other founding partner and COO is Ronald Bell, who headed the operations at infrastructure investor Actis prior to joining Fremman, and was also previously a managing director at Merrill Lynch Global PE.

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