HIG closes Europe Middle Market fund on EUR 2bn

The fund was registered in February 2020 with a target of EUR 1.99bn (USD 2.19bn). The fundraising process had officially launched as of September 2020, according to Unquote Data.

McDermott Will & Emery provided legal advice on the fundraise.

The Middle Market strategy will operate within the firm's existing infrastructure, according to a statement. Markus Noe-Nordberg, who joined HIG in 2019, heads the strategy.

HIG manages a range of private equity, debt and real estate funds, making investments in Europe and the US.

The GP held a final close for HIG Europe LBO III in November 2020 on EUR 1.1bn. The fund makes buyout, recapitalisation and corporate carve-out deals, targeting both profitable and underperforming mid-market businesses in the manufacturing and services sector with EBITDA of EUR 10m-35m. The fund focuses on southern Europe and the DACH region.

HIG is currently on the road for HIG Strategic Partners Fund II, a fund-of-funds vehicle that targets a range of private market strategies including buyout, growth, credit and infrastructure. The fund was registered in January 2021, according to Unquote Data.

Unquote reported earlier this year on the trend of large-cap players raising so-called "heritage funds" to target mid-market opportunities. Using their existing operational and fundraising infrastructure, a number of GPs have taken the decision to take advantage of deals at the lower end of the market. Such vehicles can also act as a talent retention or recruitment tool, as reported.

Sponsors who have raised such strategies include PAI Partners, EQT, Triton and Nordic Capital, while sponsors including Astorg are on the road for similar vehicles, as reported.

Investors
LPs in the fund include US pension funds Texas County and District Retirement System and Orange County Employees Retirement System, according to Unquote Data.

HIG said in a statement that the fund is backed by foundations, endowments and public and corporate pension funds, as well as consultants, sovereign wealth funds, and family offices. The vehicle has LPs from North America, Europe, Asia and the Middle East.

HIG has made a 2% GP contribution to the fund, according to Unquote Data.

Investments
The fund will back underperforming mid-market companies in Europe with valuations of up to EUR 1bn, primarily targeting western European businesses. HIG generally invests in distressed, stressed and turnaround situations.

The vehicle has made six platform investments to date and is 25% deployed. HIG backed the plumbing and heating supply business of Travis Perkins in a GBP 325m carve-out in May 2021. In August, the vehicle acquired Quick Restaurants in a EUR 240m carve-out from Burger King France.

People
HIG Capital – Sami Mnaymneh, Tony Tamer (co-founders, co-CEOs); Markus Noe-Nordberg (head of HIG Europe Middle Market); Jordan Peer (managing director, global head of HIG capital formation).

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