BluO targets €600m for restructuring fund

The former Arques Industries team has raised €300m since May in what it describes as a fundraising environment that ‘could not have been more difficult’.

German restructuring fund BluO has raised €300 million for the first close of its debut restructuring fund and is confident that it can double this ahead of its final close next year. The fund, which the firm says will be Germany’s largest restructuring specialist, will use no leverage in its acquisitions.

BluO began fundraising formally in May 2008 and held its first close today. It is expecting an additional commitment of €300 million in the spring of 2009. Investors in the fund have not been disclosed, but include a mixture of family offices and funds of funds.

Munich-based Viscardi acted as placement agents.

The classic private equity market has practically flat-lined

BluO statement

The team behind the fund comprises Peter Löw, Martin Vorderwülbecke and Markus Zöllner: all formerly of German restructuring fund Arques Industries.

“Although the moment for fundraising could not have been more difficult and the classic private equity market has practically flat-lined, BluO has been successful with its business model,” said the firm in a statement.

“In this environment there are currently over 100 companies we will look at closely. We expect two to six takeovers through BluO this year,” said founder Peter Löw.

According to the firm, its unleveraged cash-only bids will allow BluO to complete deals where other more traditional private equity buyers will fail.

In complex acquisitions, in particular carve-outs from conglomerates, vendors will often favour bidders with the ability to participate without external finance. For example, in August British firm Endless paid cash carve-out Crown Paints from Dutch healthcare conglomerate Akzo Nobel.

In related news, last week Alchemy Partners indicated that it would be coming to market in the spring of 2009 to raise its second distressed investment fund, while at the smaller end of the market accountancy firm Tenon launch its first recovery fund aimed at acquiring and turning around distressed small UK businesses.