Riverside Europe VI closes on €465m

Alessia Argentieri
22 March 2021

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The Riverside Company has held a final close for its Riverside Europe Fund VI (REF VI) on тЌ465m.

The fund was originally launched with a €600m target in April 2019. Following the coronavirus outbreak, it extended its fundraising by six months and reduced its target.

The fund is the largest raised by the GP in Europe and is nearly 40% larger than its predecessor, Riverside Europe V (REF V), which closed on €340m in 2017 and is currently fully deployed.

"We held the first half of the fundraising, which consisted primarily of commitments from our previous investors, before the pandemic outbreak," Riverside Europe managing partner Karsten Langer told Unquote. "Subsequently, we were able to attract several new investors, despite disruption and networking limitations caused by the spread of the virus. We made three successful investments after our first closing, in companies that all performed very strongly during the pandemic, and this was instrumental for achieving our positive result."

Riverside is a global private equity firm headquartered in the US, with further offices in several European cities, including London, Stockholm, Brussels, Munich and Madrid. Since its inception in 1988, Riverside has made 750 global investments. Its international private equity and structured capital portfolios include 120 companies.

Investors
The fund's LP base comprises a mix of institutional LPs – primarily pension funds, asset managers and funds-of-funds, as well as several family offices and high-net-worth individuals.

Existing Riverside investors increased their commitments to REF VI by 24% compared to REF V. Around 23% of commitments to the fund came from 20 new investors.

"We recorded a very high re-up rate, with the majority of our previous investors committing to this new vehicle," Langer said. "We were also capable of attracting several new LPs, thanks to our strong track record and investment proposition."

The fund has a geographically diversified base, with two thirds of its LPs from Europe and one third from the US.

"With this fund we wanted to increase our European investor base, which historically has been more US-oriented," Langer told Unquote. "We made a conscious effort in focusing our fundraising on Europe and were able to attract a larger number of European LPs, increasing the total percentage from around 50% in our previous fund to more than 65%."

Investments
REF VI invests in European companies operating across a wide variety of sectors, with enterprise values in the €50-300m range and EBITDA od €5-30m.

"We have a generalist, multi-sector strategy, with a special focus on technology, healthcare, food and pharma ingredients, and e-commerce," Langer told Unquote. "We invest in what we call 'little leaders'; lower-mid-market companies that have the potential and ambition to grow internationally and can benefit from our global network and operational expertise."

The fund plans to make 8-12 platform deals, while pursuing an active buy-and-build strategy with the aim of creating strong consolidation platforms across Europe. It typically deploys equity tickets of €50-150m.

Langer said: "We have a co-investment arrangement with several of the LPs in the fund; this allows us to flex the equity tickets when we find strategic opportunities that require larger investments."

The fund has already invested in three companies: Toolport, a Germany-based commercial and residential tents producer; Bike24, a German e-commerce retailer of bikes and accessories; and HealthTech, a Spanish pharmaceutical ingredients manufacturer.

"Our portfolio companies have shown strong performance, resilience and adaptability since the onset of the pandemic," Langer said. "Our three investments in REF VI have increased their sales by more than 38% and EBITDA by 46% since acquisition, delivering very strong performance despite the global disruption caused by Covid-19."

The fund is currently working on a wide pipeline, looking at a number of opportunities in different European geographies.

Langer said: "Most sectors across Europe have been recovering in the last few months and we have seen several companies achieve high valuations despite being partially impacted by the crisis, especially in the technology and healthcare industries. This trend should continue in the coming months and we expect to see new, attractive opportunities arise across Europe."