Unigestion: Euro Choice Secondary II Hits Hard-Cap
Euro Choice Secondary II (ECS II), the European small and mid-market private equity secondary investment programme, successfully completed its final close at its hard-cap of EUR 300 million. The fund attracted a high level of interest with some 59 limited partners subscribing.
The final close of ECS II was achieved by attracting strong investor support from both new and existing clients including public and private pension funds, endowments, sovereign investors, insurance companies, family offices and high net worth individuals. The subscriber base was truly global, with partners from Australia, Africa, North America, Canada and various countries across Europe.
ECS II targets value, inflection point and discount investment opportunities in the European mid-market. It also seeks to achieve other key portfolio parameters such as early de-risking, asset protection and cycle resilience. ECS II’s investment opportunities are sourced through Unigestion’s proprietary network with a focus on investments that mirror our high-conviction macroeconomic views.
The fund has already completed four investments, resulting in capital deployment of approximately EUR 80 million. The first transaction was a French growth portfolio consisting of eight small and mid-cap companies, mainly active in the business-to-business software industry. The second transaction was a direct secondary in a Nordic growth portfolio following a buy- and-build strategy. The third transaction was a German fund restructuring with an underlying portfolio of four established mid-market companies in a broad range of industries. The fourth transaction was in a single direct secondary, a UK specialist lending bank, together with a late primary fund investment in a UK fund focusing on the financial services sector. The four deals have been acquired at an average discount of 20% to fair market value, resulting in a gross TVPI of 1.4x of the portfolio as of 31 December 2017.
Dr Christian Böhler, Head of European Secondary Investments, Private Equity, said:
“Hitting the hard-cap demonstrates the strong appetite for our investment strategy and the appreciation of investors that we stay true to our investment sweet spot and limit the fund size accordingly. Our proactive sourcing approach and the focus on smaller deal sizes ranging from EUR 5 to 30 million often allows us to benefit from the attractive characteristics of this market, in particular limited competition. ECS II is perfectly in line with its targeted investment pace and we are confident that the investment will deliver attractive and stable investment performance to investors.”