AAC Capital Benelux holds final close

The Benelux spinout from AAC Capital Partners has collected ‘a few hundred million’ for its Fund III, and managed to attract about 15 investors including Goldman Sachs, AlpInvest and GE.

AAC Capital Benelux, the Benelux team from former ABN AMRO spin out AAC Capital Partners, has held a final close on its third fund.

The firm declined to disclose the exact amount it raised, but AAC Capital Benelux’s managing partner and chairman Marc Staal, told Private Equity International that the firm collected “a few hundred million” and added the final close, which was held in late September, was below €500 million.

AAC Capital Benelux, which used Credit Suisse as a placement agent, attracted approximately 15 institutional investors, including Goldman Sachs, AlpInvest and GE, Staal said.

AAC Nordic, AAC Capital UK and AAC Capital Benelux spun out of ABN AMRO following the takeover by an RBS-led syndicate in September 2007. A large part of ABN AMRO’s existing private equity portfolio was then transferred to the former investment team, with the backing of Goldman Sachs, AlpInvest and CPPB.

When AAC Capital Benelux tried to raise its own fund – separately from the UK and Nordic teams – it had to look beyond those three LPs, Staal said. “The most important thing to achieve for us was – apart from raising capital – to diversify our investor base,” he said. “We had to attract more investors to create an LP base of 10 to 15 investors, which is typically the case in a private equity fund,” he said.

AAC Capital Benelux, which came to market in 2011, now has approximately 15 LPs “of which the majority are obviously new investors”, Staal said. The LP-base has an even geographical split between the US, Europe and the Middle East, he added. AAC Capital Benelux also put in a “quite substantial” GP commitment, which was “higher than the usual 2 percent”.

“We have attracted good quality investors that are typically very selective in their manager selection and do thorough due diligence. It’s very good they feel we will have the opportunity to continue to achieve the results we have shown in the past,” he said.

Yet fundraising was not easy, he admitted. “There’s definitely a trend of LPs reducing the number of GP relations which meant we had a big challenge raising this fund. Around 2012, in the US there were clear reservations towards the euro and what would happen to the currency. This sentiment has improved now,” he said.

The Benelux region is seen as attractive by LPs, according to Staal. “Many investors feel the Nordics and the Benelux are one of the best regions to invest now in Europe. It’s a difficult time, but the Benelux is a region which produces good returns and has relatively low levels of volatility. International buyers have no reservations about buying an international company in the Benelux. Culturally, the Benelux is also a very good market for international investors. People are generally well-educated and the legal system and tax system is very stable. When you invest in the Benelux, you know that the rules of the game won’t change half way through.”

AAC Capital Benelux has the same strategy it had while it was part of AAC Capital Partners. “We invest in growth companies headquartered in the Benelux, which is something we have done for the last 12 years”. The firm hopes to do approximately 10 to 12 investments from the fund.

The Benelux team is so far the only franchise that has successfully raised capital. AAC Capital UK had collected $25.6 million on a target of $643 million, according to a SEC filing as of July 2011. It is understood AAC Capital UK abandoned plans last year to raise a fund.

It is unclear whether AAC Nordic is still fundraising. In June, PEI reported the firm was attempting to raise €150 million for its debut Nordic fund, and had hired Amala Partners to place the fund. However Staal, AAC Nordic and Amala Partners declined to comment on whether the fund was still in market.

The collective teams have approximately €1.7 billion under management across two funds, AAC Capital NEBO Fund I, a €653.3 million 2007 vintage, and AAC Capital NEBO Fund II, a €964.5 million 2009 vintage, according to Private Equity International’s Research & Analytics division.

These funds continue to be managed by the UK team, the Nordic team and the Benelux team. The vehicles can’t make any new investments, but there’s still room for add on acquisitions, Staal said.