Low-profile Rhône Group eyes target of $3.3 bln for Fund VI

Rhône Group is targeting more than 3 billion euros ($3.3 billion) for a sixth flagship buyout fund, Buyouts has learned.

The target was disclosed in a recent financial report by listed French investment firm Eurazeo, which holds a minority interest in Rhône. Eurazeo said the private equity firm began fundraising for Rhône Partners VI in July.

Rhône registered the vehicle with the SEC this month.

Rhône reportedly secured 2.6 billion euros in the 2015 close of its fifth fund, more than twice the amount raised by its prior vehicle. Fund V was approaching more than 80 percent deployed in the early months of 2019, Eurazeo said, paving the way for the launch of its successor.

Limited partners in Rhône funds include family offices, financial institutions, individuals, pension plans, sovereign wealth funds and university endowments, the firm’s ADV filings showed. Taiwan Life Insurance is a Fund VI investor, Buyouts’ sister publication Private Equity International reported, committing 50 million euros.

Rhône, a traditionally low-profile investor with offices in New York and London, could not be reached for comment.

Rhône was founded in 1996 by Managing Directors Robert Agostinelli and Steven Langman. The firm invests in mid- and large-cap businesses with a pan-European or transatlantic presence and opportunities for global growth. It has investments in companies in the business services, chemicals, consumer products, food, industrial, materials, mining and shipping sectors.

Rhône oversees more than $5.5 billion in assets. The total takes in both its PE operation and real estate joint venture with collaborative work space provider WeWork.

Eurazeo, an active GP stakes investor, acquired a 30 percent interest in Rhône in 2018 in exchange for $100 million in cash and 2 million Eurazeo shares. The deal, intended to broaden the investment capabilities and networks of both firms, entitled Eurazeo to three representatives on Rhône’s management board.

Rhône made several new investments this year. They include Rexair, a Troy, Michigan-based maker of home vacuum cleaning systems, acquired from Newell Brands. Rhône also completed its purchase of a 45 percent stake in Spanish explosives manufacturer Maxam for 275 million euros. The seller was Advent International.

In addition, Rhône is part of a consortium of shareholders that in October agreed to take Hudson’s Bay Company private for C$1.9 billion ($1.5 billion). The firm two years ago invested $500 million in the Canadian retailer and owner of Saks Fifth Avenue.

Rhône also in 2019 sold its majority stake in Garda World, a Montreal-based provider of security services, to BC Partners for C$5.2 billion. The deal generated a 2.2x gross multiple of invested capital and a gross IRR of more than 28 percent, Eurazeo said.

John Bolton, the ex-national security adviser to the Trump administration, is an adviser to Rhône and its portfolio companies. Rhône announced Bolton’s reappointment to the position in September.

Action Item: See Rhône Group’s ADV filings here.