French mid-market player, Perfectis Private Equity has closed its debut fund at EURO80 million. It is over a year since the fund announced its first close at EURO55 million in October 2000, but the fund has exceeded its original target of EURO75 million.
The new venture was founded by veterans of 3i France, Jean-Marie Lavirotte and Gabriel Fossorier, who were both with the firm for 11 years. During their time at 3i, Lavirotte and Fossorier invested three funds completing 43 deals and achieving a 25.7 per cent IRR for 1990 to 2000. The five-strong team also comprises Delphine Dufour, Stephane Bergez and Laurent Vallee. Dufour and Bergez also have history at 3i.
The fund will focus on mid-market MBOs, MBIs and growth capital deals. According to Lavirotte, the current climate is favourable in the French mid-market buyout segment. There is significant deal flow due to family succession issues and company restructuring for buyouts or build-ups in consolidating sectors and competition is less intense than in the large buyout segment. The fund will invest in around 12 to 15 companies with an average investment size of between EURO15 million and EURO100 million.
For a spin-out fund and in spite of the challenging fund raising environment, Perfectis I has attracted a broad range of institutional investors, including fund-of-funds from France, Switzerland, Germany, UK and the US. Around half of the investors in the fund come from outside France. EULER-SFAC, a French leader in the credit risk insurance industry, is sponsor and anchor investor in the fund. Further investors include Swiss Re, Groupe Credit Agricole, Partner Re, CNP and Duke Street Capital. Acanthus Advisers, represented by Armando D’Amico and Michel Delouvrier acted as placement agent for the fund in the final part of the fund raising. The fund is structured as a classic French FCPR comprising a two per cent management fee and a 20 per cent carry subject to a six per cent hurdle. Perfectis has already committed to four transactions.