21 Invest closes euro323m fund

21 Invest Industry Fund has announced a final closing of euro323 million. It will be invested in mid-market buyouts and build-ups in Southern Europe.

The fund was launched in 1999 and hopes to capitalise on the expanding private equity industry in Southern Europe. The philosophy behind its investments is to build businesses through an industrially driven pan-European approach. 21 Invest has not raised a third party fund before but it has several years’ experience making private equity investment on behalf of the Benetton and Bonomi groups. Susan Lloyd acted as placement agent for the fund in Europe and David Kirby played the same role in the US.

21 Invest aims to invest euro15 million to euro50 million primarily in Italian and Spanish companies. Although the fund won’t exclude investments elsewhere Abel Ducloux, general manager at 21 Invest in London, said: “The deal flow we are seeing is so substantial we won’t have much time to hunt around for deals in markets outside Southern Europe.” The initial target for the fund was euro275 million. But, following the fund’s first closing of euro142 million in March last year, it was decided to cap the target at an extra euro50 million. (This was on top of the initial target of euro275 million.) 21 Invest is looking for opportunities to invest in profitable mid-sized companies with strong market positions or in high growth industries with good potential for profitability.

The 21 Invest Industry Fund made it’s first investment in December last year to Sirti, an Italian telecom network company. It designs, installs and maintains copper, fibre optic and wireless networks for public and private clients.

The Benetton and Bonomi families, through 21 Investimenti and Invest International Holdings Limited, respectively, have principally funded the activities of 21 Invest. However the fund has commitments from a diverse range of institutions including banks, insurance companies, pension funds, families, corporates and fund-of-funds. Around 70 per cent of the capital has been raised from across Europe, with the remaining 30 per cent coming from investors in the US and Middle East.

Although more private equity funding is now available in the region there are doubts there will be sufficient deal flow to absorb the increased capital. According to the Italian Venture Capital Association, the number of Italian buyouts fell from 35 in 1999, representing an investment of euro830 million, to 14 deals worth euro757 million last year. However 21 Invest, which has offices in Milan, Madrid, Paris and London, has 20 investment professionals with a network of industrial and entrepreneurial contacts. The investor is confident this will generate a proprietary deal flow in the industrial, manufacturing and services sectors. Large pan-European houses are also showing an increasing amount of interest in the region but are likely to focus on larger deals than 21 Invest.