Newcomer MBO Partenaires is targeting the under-served French small buyout segment. MBO Partenaires is anticipating a September close on its maiden fund at EURO100 million. The venture was set up four months ago when a six-strong team from Financiere Natexis Banque’s leveraged buyout arm, Initiative & Finance left to set up its own fund.
The team comprises six investment professionals and is headed by Jerome de Metz, who was with Initiative & Finance for over ten years. Combined, the team boasts 80 years of culminated experience in private equity and over 12 years experience working together.
The fund is targeting an under-served sector in the French private equity market small cap MBOs with a valuation of between EURO3million and EURO35 million. In France, there are few players targeting this segment and MBO Partenaires has few competitors, the most prominent being Initiative Finance and Ciclad. Other would-be competitors are increasingly focusing on larger deals. Siparex and 3i, which were previously targeting similar sized deals, are two such players.
The MBO Partenaires team intends to build up its portfolio companies to become mid market candidates and as part of its exit strategy the team will court mid market private equity players to sell on the companies. An exit route that is growing in popularity, last year the secondary buyout route in France was the number one form of exit.
The team is confident it will achieve its target thanks to its reputation in the French market, boasting 73 closed deals with Initiative & Finance and 47 exits generating net capital gains of EURO199 million and an IRR of 54 per cent.
MBO Partenaires hopes to continue this track record and stands a good chance with an abundance of opportunity in the sector. Around 85 per cent of French profitable companies are in the firm’s target range, giving the fund a scope of around 15,000 companies.