Access Capital Partners, the French fund of funds manager, has announced the creation of an in-house co-investment group.
The move, which involves setting up a specialised team and launching a dedicated vehicle, will seek to take advantage of an increasing number of co-investment opportunities offered by GPs, said Dominique Peninon, managing partner at Access Capital.
“In the current fundraising environment, some GPs may end up with funds of stable or smaller size, and banks have become more conservative with leverage. So there is a clear need for additional equity, which co-investment is in a good position to answer to,” Peninon told Private Equity International in an interview Tuesday.
These new capabilities will also help Access answer growing appetite for co-investment opportunities, he argued: as LPs seek a deeper understanding of GPs’ investments, they’re showing increasing demand for direct exposure to portfolio companies.
“Having co-investment capabilities will allow us to expand the range of investors we’re speaking to: family offices, for example, tend to be more receptive to direct investments opportunities than to a fund of funds approach. And the prospect of reduced costs also helps,” he said.
The firm’s new vehicle is to be headed by Paul Bekx and Benjamin Barrière, who are both joining from Dutch firm Gilde Buy Out Partners. Their experience will prove crucial in sourcing deal opportunities, Peninon said.
“Over the last few years, we’ve seen a growing equity co-investment dealflow that we did not wish to exploit, because we wanted these opportunities to be looked at by a team with significant experience in direct investing in equity,” Peninon said. “The GPs are now aware that we are building up strong in-house capabilities, and we’re also going to be much more proactive in looking for co-investment deals. So I expect a good number of opportunities to materialise.”
No target has yet been officially decided for the new fund, Access Capital Co-investment Fund I, which has just exited its pre-marketing phase.
Peninon expects it will make up to eight investments a year.
The vehicle will add to the firm’s existing capabilities, which comprise its flagship buyout fund of funds as well as Selected Mezzanine Fund I, a mezzanine fund of funds launched in 2008.
Founded in 1998, Access has around €4.7 billion of assets under management. With offices in Paris, London, Brussels, Helsinki and Munich, it has raised five small and mid-cap buyout funds of funds since inception.
Its latest vehicle reached a final close on €500 million in January 2012, in excess of its original €350 million target.