MCH sets up continuation fund to retain Europastry stake – report

The new vehicle was set up in July, according to the report.

The GP acquired Europastry, a Spain-based frozen bread dough and patisserie firm, in 2011 via MCH Private Equity III.

According to the El Economista report, the PE house set up MCH Continuation Fund in July 2020 after ruling out an exit via either a stake sale or an IPO. The new vehicle will house MCH's 20% stake in Europastry and Portuguese oncology clinics asset Lentitudes, which was acquired in 2014 from the same fund.

Investors in MCH Continuation Fund include those of MCH Private Equity III, along with new investors, according to the report. 

MCH III launched in 2008 with a target of €300m. Quilvest and LFPE (La Financière Patrimoniale Européenne) were among the LPs to commit to the fund, according to Unquote Data.

Continuation vehicles and fund extensions are thought to be increasing in popularity this year as many private equity houses postponed exits and are looking at ways to extend holding periods amid coronavirus-related uncertainty.

Recent examples include Pantheon and LGT taking a lead on the €200m Medixci continuation vehicle in September, in what was dubbed an "exit and reinvest", and thought to be the first in the clinical-stage biotech industry. Prior to this, Hamilton Lane backed Legend Capital's $200m restructuring of its VC fund in February, transferring 12 investments into a new vehicle as a means of extending the holding period; and in December last year, PAI completed a continuation fund with secondaries capital, transferring the remaining assets from Fund V into the new vehicle. 

French GP Eurazeo acquired a 25% stake in MCH Private Equity in April 2019.

MCH Private Equity had not returned requests for comment at the time of publication.

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