Rothschild's FAPI II closes on €775m

JosУЉ Rojo
06 October 2015

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Five Arrows Principal Investment (FAPI), the private equity arm of Rothschild Merchant Banking, has closed its second fund on тЌ775m less than a year after launch.

According to Rothschild, the fund was "significantly oversubscribed" beyond its €700m target.

FAPI II was launched in late 2014. The vehicle follows the "2-8-20" fees, hurdle and carry industry standard. The process led to a €493m first close in March 2015; the figure increased to €508m once Rothschild employee commitments were factored in.

King & Wood Mallesons provided legal advice for the fund.

The closing of FAPI II comes more than five years after fundraising concluded for its predecessor. Having raised €585m, FAPI I carried out the last of its 15 investments in February 2015, when Rothschild acquired UK-headquartered fintech Pirum.

Investors
According to Rothschild, the majority of commitments to FAPI II originated from backers of FAPI I and other existing Rothschild funds. The group counted 30 LPs at the time of the first close in March; it has since attracted additional institutional investors, including family offices.

Investments
FAPI II will write €20-70m tickets for European mid-market companies valued in the €50-500m range. Cheques of up to €100m will be considered when co-investment takes place. A focus will be placed on proprietary deals, sourced outside auction processes.

The fund will seek assets within the European healthcare, software and technology services, business and education industries as well as a number of segments within the consumer sector.

Rothschild, which is aiming to back 12-15 companies with FAPI II, announced a maiden deal for the vehicle in June 2015, when it acquired Danish legal data provider Karnov Group.

People
FAPI II is currently managed by a 20-strong investment team, up from the 16 employed by Rothschild at the time of the first close in March 2015. Co-managing partners Javed Khan and Emmanuel Roth oversee the London- and Paris-based operations for the fund, respectively.