Five Arrows registers next buyout vehicle

Greg Gille
14 July 2021

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Five Arrows Managers, the private equity arm of Rothschild & Co, has registered its next buyout fund, Five Arrows Principal Investments IV (FAPI IV).

The fund was registered in Luxembourg on 9 July. It will have a 10-year lifespan based on the date of first close.

Rothschild had not returned a request for comment at the time of publication.

The previous vehicle in the strategy, Five Arrows Principal Investments III (FAPI III), closed on its EUR 1.25bn hard-cap in 2019. The vehicle was registered in March 2018 and had a target set at EUR 1bn, according to Unquote Data.

FAPI III was larger than its predecessor, FAPI II, which closed on EUR 775m in 2015.

FAPI III's LPs are institutional backers, corporates, family offices and high-net-worth individuals from Europe, North America, and Asia. Rothschild, the partners and senior staff of the firm, and the fund's investment executives also made a substantial commitment to FAPI III, Unquote reported at the time.

The focus of FAPI III's investment strategy is similar to its predecessor's – the fund targets mid-market companies across Europe with enterprise values in the EUR 75m-300m range. The fund's sector focus is limited to healthcare, education, data, software and technology-enabled business services.

Five Arrows has been active on the investment side in recent months. It notably bought a stake in UK-based drug discovery firm Sygnature Discovery from Phoenix Equity Partners in June. The deal valued the business at around GBP 300m, or 20x its GBP 15m EBITDA, as reported.

Five Arrows Principal Investments also made a £120m investment in UK-based construction software developer Causeway Technologies, taking a minority stake in the company. The GP also reinvested in the EUR 1.2bn buyout of real estate agent network IAD in February in a deal that saw Insight Partners take a minority stake for a EUR 300m investment; Five Arrows had held a stake in the business since 2016.

The GP has announced two exits in 2021 to date, most recently selling its stake in software platform White Clarke Group to Thoma Bravo portfolio company International Decision Systems. In March 2021, the GP sold its stake in legal disputes platform Opus 2 to Astorg in a EUR 350m SBO.

On the fundraising side, Rothschild recently closed its Five Arrows Private Equity Programme II (FAPEP II) vehicle on EUR 366m, above its initial target of EUR 250m. The FAPEP funds follow a broad strategy covering fund investments, secondaries and co-investments.

The latest fundraise brought Five Arrows' total assets under management to around EUR 16bn across four strategies: corporate private equity; senior and junior credit; primary and secondary fund investing; and co-investments. Last year, secondaries fund Five Arrows Secondary Opportunities V also closed on EUR 1bn, surpassing its EUR 700m target.