Eurazeo to invest up to €2.4bn in the US

The French investment firm, which opened its first US office in New York last September, has started looking for US mid-market businesses.

Paris-listed Eurazeo is looking to invest a third of its €6 billion in assets under management in the US over the next five years.

“We have a plan to deploy as much capital as possible in the US, of course with the right conditions – the right price and the right assets,” Philippe Audouin, chief financial officer and member of the executive board, told Private Equity International.

“I would not be shocked if within the next five years 30-40 percent of our assets were to be in the US, because it’s a huge market, it’s the largest market in the world.”

Eurazeo opened its first US office last year in New York, with a team of five investors and two senior advisors. Virginie Morgon, deputy chief executive officer of Eurazeo, opened the office in September, becoming president and CEO of Eurazeo North America.

Eurazeo is actively seeking mid-market businesses in the consumer products and business services sectors, writing equity cheques of between $100 million and $500 million.

Eurazeo’s AUM comprises €5 billion of balance sheet capital and €1 billion of third-party capital. Audouin said certain of Eurazeo’s characteristics, such as permanent capital, its offices in Shanghai and Sao Paulo that help Eurazeo portfolio companies expand into those regions, and its ability to help US companies develop in Europe, make the firm an attractive proposition for business owners in the US mid-market.

Audouin said the group is getting “more and more international”, and that three-quarters of deals analysed by Eurazeo’s investment teams in 2016 involved companies that were outside France.

Last week Eurazeo released its 2016 results, posting a 5.3 percent increase in revenues across its portfolio of assets to €4.3 billion and a 6.7 percent increase in net asset value per share. Eurazeo is proposing a dividend per share of €1.20.

Audouin told PEI Eurazeo has posted 12 consecutive quarters of growth, and cumulative growth of 33 percent since 2011.

2016 was an active year for Eurazeo, which invested €833 million in nine companies and sold three companies in total or in part, generating €1.4 billion in disposal proceeds.

These included the sale in September of its investment in French residential property management services provider Foncia to a consortium led by Partners Group in a deal valuing the business at €1.833 billion.

Eurazeo owned Foncia alongside pan-European private equity house Bridgepoint, and the sale generated a multiple on invested capital of 2.4x and a net disposal gain of around €1.134 billion for the two firms, as reported by PEI.

In January Eurazeo announced it had raised €500 million in third-party capital for Eurazeo Capital II. The capital was set to be invested in a portfolio of Eurazeo’s existing assets. The fund will take a 25 percent stake in each of the companies, with the remaining 75 percent held on Eurazeo’s balance sheet, as reported by PEI.