Idinvest Partners, formerly part of the Allianz Group, has raised €400 million for its third mezzanine fund, Idinvest Private Debt III, exceeding its hard cap of €350 million.
The fund is the firm’s first to attract a majority of commitments from investors outside of its base of France. Capital will be invested in companies all over Europe via mezzanine and unitranche, 40 percent of which has been deployed already.
The fund received a significant proportion of investment from family offices, Christophe Bavière (pictured), chief executive officer of Idinvest Partners, told PDI. This is probably due to the fact that family offices are relatively reactive in their investment strategy, he said. With many coming from entrepreneurial legacies also, they are naturally drawn to the borrower base that this fund caters to he said – namely the lower-end of the mid-market.
A deep understanding of the underlying company is required when investing in mezzanine debt, Bavière continued. The fund will target in the mezzanine space a cash coupon of between Euribor plus 5 and 6 percent. Furthermore, a PIK element will ensure additional capitalised return of 5-6 percent. Access to warrants could also generate higher returns, he said. In a best case scenario, the fund is targeting an expected return of around 15 percent.
Also targeting unitranche and debt purchases on the secondary market, the fund will have the flexibility to come up with investment solutions in various financing situations or investment climates. Unitranche is particularly attractive to private equity funds which are looking for speed of execution, he said.
Idinvest Private Debt III, launced in early 2014, will target investments of €5 million to €40 million in the mezzanine and unitranche debt of European small- to medium- sized enterprises, predominantly backed by private equity firms.
“Backing French and European SMEs, supplying the equity and debt capital they need to support their organic or external growth, international expansion and innovation – that is the mission of Idinvest Partners,” said Bavière in a statement.
“Idinvest Partners is now a partner for investment funds and SMEs throughout Europe, as evidenced by the mezzanine and unitranche debt financing of J&S and Prae-Turbo in Germany, Italpresse in Italy, and more recently Axelliance in France,” François Lacoste, partner at the firm, added.
Paris-headquartered Indinvest has €5 billion assets under management, comprised of private debt, private equity, fund of funds, growth capital and secondary investments, and has around 50 staff. Founded under the name AGF Private Equity in 1997, the firm was formerly part of the Allianz Group until 20110, when it joined forces with IDI Group to become independent.