Astorg Partners, a French mid-market firm, has begun talks with its investors to raise a €600 million fund double the size of its second fund.
One investor familiar with the early discussions said: “The firm had a long fundraising for the 2004 fund. They were on the road for 18 months. But the results have vindicated the firm and its backers.”
He said the firm, which span out of French industrial group Suez in 2004, has had a spectacular success with its investment in Sebia, a medical diagnostics business, which returned 12 times the firm’s original investment in its sale to Montagu Private Equity.
Sebia was an investment from the firm’s second €185 million fund and Astorg rolled over a minority stake in the business from its third fund.
The investor said: “The rest of the fund has done well, generating between two and three times cost and Sebia means Astorg should not have as much trouble persuading investors to come back for fund IV.”
Formal marketing will not begin until next year.
He said the new fund would focus on trickier deals, where there are complicated shareholder structures, often in family-owned businesses, or limited cashflow. Astorg believes this investment thesis will secure a relatively uncontested dealflow in France, compared to the more crowded plain vanilla mid-market.
The fund will have a hard cap of around €750 million should demand exceed initial expectations.
Astorg said at the time of its third fundraising it drew commitments from 17 institutional investors, including: AIG, Adams Street Partners and Invesco of the US; AXA and CDC of France; Morley Fund Management and Scottish Widows of the UK; Belgian bank Fortis; and Iceland’s Landsbanki.
Astorg declined to comment.