Vitruvian closes fourth fund on €4bn

The fund’s original target was €3.75bn, with a €4bn hard-cap. The fund was oversubscribed, according to a statement.

VIP IV was formally launched in April 2020 and is domiciled in the UK. A spokesperson for the firm said: “The majority of the fundraise was done virtually using a number of platforms. In terms of ability to raise capital, and in the context of the Vitruvian investment strategy there was little impact from the coronavirus crisis, and in fact a number of the Vitruvian portfolio companies have been net beneficiaries of the Covid-19 outbreak."

The fund’s predecessor, VIP III, closed on €2.4bn in June 2017. It was announced in August 2016 with a target of €2bn. It has made a number of investments across Europe including consumer finance company Smava and holiday rental company Sykes Holiday Cottages. It has yet to make any exits.

The spokesperson continued: “A number of the firm’s investment themes relate to technologies that ended up being accelerated by the coronavirus and the relatively resilient performance of the firm's funds during this period of change and recessionary threat we believe contributed to investor confidence."

Evercore Private Funds Group and Monument Group acted as placement agents and Kirkland & Ellis provided legal advice.

Investors
The fund received commitments from more than 120 institutions with more than 50% of the fund raised from North America, around 30% from Europe and the remainder of investors hailing from Asia and the Middle East.

Types of investors in the fund include sovereign wealth funds, public and corporate pension funds, funds-of-funds, banks, insurance companies, endowments and foundations.

The spokesperson said: “Many investors in previous Vitruvian funds have upped their ticket size for VIP IV and we are pleased with the interest from sovereign wealth funds in particular.”

LPs in VIP III include Adams Street Partners, Abbott Capital Management, BNP Paribas Capital Partners, Cambridge Associations, the Ford Family Foundation, Harbourvest and Partners Group.

Investments
VIP IV will focus on companies with enterprise values of around €75-500m and potentially up to more than €1bn.The typical investment to any one individual portfolio company is expected to be in the range of €35-€250m.

Vitruvian mainly invests in growth buyout and growth capital phases of investment and in asset-light sectors, such as technology, healthcare, financial services and business services.

The spokesperson said: “Vitruvian believes that sector emphasis should be flexible over time to reflect where the best investment theme ideas are emerging as the underlying drivers of business change impact on new areas. This thematic flexibility has served the firm well to date during the recent months.”

The expected holding period for investments will typically be between 3-5 years.

The spokesperson said of the increase in the size of the fund against its predecessor: “The Vitruvian investment strategy has not been adjusted following Covid-19. Given the increase in fund size, it is expected there will be more investments in this fund than for VIP III.” VIP III was expected to make 20 investments.

The fund has yet to make any investments. The spokesperson declined to comment on timing, but said: “Now the fund has reached its hard-cap we are seeking to invest it and have a strong pipeline.”

People
Vitruvian Partners – Mike Risman (managing partner); David Nahama (senior partner).

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