Five Arrows reaches €493m first close

Greg Gille
05 March 2015

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Rothschild's Five Arrows Principal Investments has held a first close on €493m for its second European lower mid-market private equity fund.

Five Arrows Principal Investments II (FAPI II) has a target of €700m. In addition to the amount pulled in at first close, commitments from Rothschild employees are currently being processed, which will push the amount collected so far to €508m.

The fundraising process began at the end of 2014. No placement agent was used, while King & Mallesons is providing legal advice. The vehicle follows the industry-standard '2-8-20' fees and carry model.

The vehicle's predecessor, FAPI I, closed on €583m in early 2010. The fund has made 14 investments to date and is currently in the process of acquiring Pirum Systems, after which FAPI I will be fully invested.

Five Arrows Credit Solutions, Rothschild's debt fund focused on the western European mid-market, reached a final close on €415m in May last year after slightly more than one year on the road.

Investors
FAPI II has so far attracted around 30 LPs. The large majority of investors that have come in at first close are LPs in FAPI I and/or other Rothschild funds. The LP base comprises institutional investors, family offices and high-net-worth individuals from across the globe - mainly from Europe and Asia.

Investments
FAPI II will pursue a similar strategy to its predecessor, investing in European mid-market businesses. It will deploy tickets between €20-70m in companies with enterprise values ranging from €50-500m. If the opportunity arises, FAPI II will also be able to deploy in excess of €100m if co-investing with its LPs. The vehicle will complete between 12-15 deals.

The fund will predominantly focus on the healthcare, education, business services and software & technology services sector, as well as several sub-markets in the consumer space. It will invest in buyout, growth capital or replacement capital transactions.

People
Javed Khan and Emmanuel Roth lead a team of 16 professionals at Five Arrows Principal Investments.