Ex-EQT execs close oversubscribed debut fund for DACH

EOS Fund I follows a period of deal-by-deal investing for the lower-mid-market focused firm.

Former senior executives of EQT and Hg have held the final close on their debut fund focused on the DACH region’s small-cap market.

EOS Fund I closed on its €175 million hard-cap, €50 million more than its original target, according to a statement seen by Private Equity International.

Munich-based EOS Partners is led by partners Peter Winkler, Philipp Wegener and Thomas Roehrl. Winkler and Wegener are former executives at EQT. Wegener was also previously an investment manager at Hg. Roehrl was a managing director at Hg portfolio company Qundis prior to joining EOS in 2018.

Corporate pension funds, university endowments, funds of funds and family offices from Europe and North America invested in the fund, according to Winkler. The fund also received backing from a number of senior PE executives, he added.

EOS officially launched the vehicle in February last year and held a first closing in September. By March this year and before country-wide lockdowns were enforced due to the coronavirus pandemic, the firm had gathered €120 million from LPs, Winkler said.

Capital raised for the vehicle will target companies with EBITDA of between €1.5 million and €6 million, which are focused on software, business services and industrials. The firm will invest between €5 million to €30 million per transaction.

EOS was previously deploying capital on a deal-by-deal model and had invested in three pre-fund deals since setting up the firm in 2015. With deals secured, the firm made the decision to raise a dedicated fund last year as a continuation of its strategy. This would allow faster access to capital to fund more buy-and-build investments and to grow the team, Winkler said.

The firm has invested in two platform deals from the fund and two add-ons. The pair focused on the larger end of the market in their previous firms and decided to target the lower mid-market for their vehicle due to the number of opportunities in Germany’s mittelstand or small and medium-sized companies, the country’s strongest driver of innovation and technology, according to Wegener.

“These companies are services oriented, founder-led and are facing a generational shift. We thought that this segment is where we can make good deals and buy into businesses at fair prices, apply our toolkit, develop platforms, and buy and build,” Wegener added.

Germany accounted for 29 percent of deal value in European buyouts as of H1 2020, enhanced by industrials deals, according to a report from law firm CMS.

DACH-focused funds gathered more than $1 billion between January and June this year, half the amount raised in the equivalent period last year, as the pandemic slowed fundraising, according to PEI data.

MVision Private Equity Advisors advised on the fundraise and Clifford Chance acted as legal advisor, according to the statement.