BAEPE Squares Away Euro Fund II –

Banc of America Equity Partners Europe (BAEPE) has closed its second fund at EURO590 million ($517.3 million), more than half of which (EURO300 million, $263 million) has already been invested. This brings the total of BAEPE’s funds under management to more than EURO790 million ($692.7 million), raised exclusively from Bank of America.

“Our new fund benefits from both our global network and our substantial expertise in specific countries and regions around Europe,” said William Obenshain, a managing partner of BAEPE. “As always, our approach will be to partner with talented management teams and utilize the skills of our professionals in Europe to produce significant long-term value for our portfolio companies.”

BAEPE is looking to invest in growth/expansion capital, and perform LBOs and recapitalizations across western and central Europe. The fund has already made investments in Germany, Sweden, Spain and the UK. It is also looking at businesses in France, Poland and Hungary, and recently opened a Milan office.

The sectors BAEPE prefers include communications, media, specialty manufacturing, distribution, logistics, business services and outsourcing. Typically, BAEPE invests between EURO20 million ($17.5 million) and EURO100 million ($87.7 million) and anticipates exiting investments after three to seven years. The fund’s portfolio includes ETR Group (Sweden), Porcelanatto (Spain) and Kabel NRW (Germany).

“There’s never enough good deal flow no matter where you are,” Obenshain said. “For example, the number of middle market opportunities that you expected to see in Germany at this time hasn’t developed yet. But, on the other hand, we’re seeing a number of interesting opportunities coming out of Sweden, France and Italy.”

In 1996, BAEPE raised its first European fund of EURO200 million ($175.39 million) through its partnership with the principal investing division of Bank of America. Since then, the firm has invested EURO500 million in more than 20 companies throughout Europe. It employs 15 investment professionals in London, Frankfurt, Warsaw and Milan, and the firm does not expect to bring on additional personnel to help manage the second fund, Obenshain said.

The second fund started making investments in 1999 and Obenshain expects it will be fully invested in around 15 companies over the next couple of years. He added that BAEPE was under no pressure to invest the capital and would choose opportunities carefully.

“Compared to the first fund, BAEPE’s investment policy is more developed, sophisticated and with a more defined strategic and geographic focus,” he said.