Vermeer Capital, a newly formed French turnaround investor, has held a first close on €75 million ($116.8 million) for its first fund after seven months of fundraising, according to Olivier Elmalek, a partner at the firm.
The firm aims to hold a final close on €90 million within the next three months.
Elmalek said: “The credit crunch in the financial system means banks are giving less and less credit to companies which are really healthy, and so they can become distressed even if they have good fundamentals.”
He added that the high levels of leverage and the high prices paid for leveraged buyouts in recent times would be a driver of deals. The large number of companies in France run by older management teams looking to sell would also provide opportunities.
The legal framework has also changed in France allowing companies to act earlier on difficulties. In the past, problems would sometimes be ignored until too late, he said.
The team setting up the fund provided 10 percent of the total capital, according to Elmalek. He said the large management contribution was designed to allay potential investors’ worries about a first-time team.
The remainder of the capital came from institutional investors such as Allianz Private Equity, the captive arm of the insurance group, as well as private individuals.
The firm was founded by Jean-Louis Detry, who has led several turnarounds, including Disques Vogue, the first independent French record company, and Datacine Group, a cinema post-production company bought out from Vivendi Universal. He also recently led the turnaround of Léon de Bruxelles, a French chain of restaurants, which has increased in value by 11 times in five years.
Michel Bon is a senior partner and member of the firm’s investment committee. Bon is the former chief executive of France Télécom, the telecoms company, and Carrefour, the French supermarket, as well as Caisse Nationale, part of Crédit Agricole.
Elmalek established and managed the business recovery department at financial advisory firm Accuracy, part of Aon, the financial services firm. He also worked in turnarounds at Deloitte and PricewaterhouseCoopers, and led the turnaround of Spatz, a textile company.
The remaining partner at the firm, Pierre Khoury, led the turnaround of Ateliers Volume, a portable display stand company.
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