Crédit Agricole’s private equity arm to start co-investment business

Armed with €100m of initial committed capital, the French commercial bank’s private equity division will begin a co-investment business to complement its existing funds. Paris-based Frantz Paulus will head co-investment activities for the bank.

Crédit Agricole Private Equity (CAPE), the private equity arm of French commercial bank Crédit Agricole, is expanding into private equity co-investing via two new co-investment funds with committed capital of €100 million ($145 million).

The co-investments will be targeted at mid to large-scale LBO and development capital deals across all sectors, with investment capacity of €15 million per deal.

Frantz Paulus

“We want to be able to offer all the private equity services we possibly can [to our LPs] and that includes co-investment,” said Frantz Paulus, the director in charge of co-investment at CAPE.

Paulus joined CAPE in March from a French family office specifically to start up the group’s private equity co-investment business, which CAPE decided to enter last year.

Since then, it has raised two funds dedicated specifically to co-investment activities. One is captive to Crédit Agricole’s insurance arm and is capped at €50 million. The other has held its initial close at €50 million and is open to external LPs. Paulus said that he is currently in the process of meeting investors to raise more money for the fund, which he said will eventually reach €100 million to 150 million in size. Additionally, he is looking to hire a team of several professionals to head up CAPE’s co-investment practice with him.

CAPE has already invested alongside Weinberg Capital Partners in their July buyout of Balitrand, a French distributor of building fit-out supplies, taking a 23 percent stake. Prior to that, CAPE also invested a 0.5 percent stake alongside the Carlyle Group in their €1.1 billion investment in French cable operator Numericable.

Paulus mentioned The Carlyle Group among the list of GPs that CAPE will seek to co-invest with. Other names included The Blackstone Group, CVC, Candover and “all the big guys” in whose funds Crédit Agricole is a limited partner.

“We will develop a proprietary deal flow going forward, but obviously it is easier to start with funds that we know,” Paulus said.

CAPE, however, will not co-invest alongside its other private equity funds, which focus on buyout and expansion capital, venture capital, mezzanine, renewable energy, infrastructure and special situations. The group’s total capital under management is €2 billion.