21 Centrale Partners, the French development capital arm of 21 Group, is working with placement agent Triago to bring new European limited partners into 21 Développement 2, which has a E125m target.
21 Centrale, which prior to joining 21 Group was trading as Société Centrale pour l'Industrie, held a first closing on E56m in May, having received commitments from existing investors including Crédit Agricole Asset Management, MAAF, CCR Actions and the European Investment Fund. A E25m cornerstone investment has been made by parent 21 Group. Unicredito has also made an allocation to the fund.
According to Mathieu Dréan of Triago, which in 1998 introduced the then publicly quoted Société Centrale pour l'Industrie to 21 Group and helped raise its first development capital fund thereafter, 21 Centrale’s approach to funding late-stage French mid-market businesses away from the buyout market is subject to little competition.
“Historically, French bank subsidiaries would look to provide equity capital alongside debt in return for a minority position in a business, but they are now less active in this market. In the late 1990s companies looking to raise growth capital could also look to the stock market for an early IPO, but now that route is closed and entrepreneurs are aware that they require more from an investor than just cash”, said Dréan.
One French financing house to take a similar interest in providing expansion capital to French-based companies is Siparex, the private equity firm.
21 Centrale has nine investment professionals and is looking to invest the new fund in 12 to 15 companies. The group is led by Gérard Pluvinet, Henri Despointes and François Barbier, who have been working together for the past 15 years.
The fund, which has a FCPR structure, is being advised by Salans, Hertzfeld & Heilbronn, the Paris-based law firm and private equity specialist.