Exclusive: Azulis targets €200m for Fund V

The Paris-based firm aims to hold a first close of more than €100m before year end

Azulis Capital, a French mid-market firm, will shortly come to market to target €200 million for its fifth buyout fund, PEI has learnt.

The fund, which will officially come to market at the end of the month, has a €250 million hard-cap, according to several sources familiar with the matter.

Azulis is aiming to hold a first close of more than €100 million before year end. It is expected that approximately 60 percent of existing investors will re-up, the sources added.

It is understood that Acanthus Advisers is supporting Azulis with the fundraising. Both Acanthus and Azulis declined to comment.

Azulis’s fund V will target companies with enterprise values between €20 million and €100 million. The firm typically invests in food, business services, retail, consumer goods and healthcare sectors.

The firm invests through a buy-and-build approach, both in companies that are enjoying strong domestic growth – like care providers benefiting from an ageing population – and in export-led companies that generate up to 80 to 90 percent of their revenues internationally.

Azulis is currently investing its Fund IV, a €225 million vehicle which was raised in 2010. Fund IV has invested in 16 companies and is fully deployed, although it still has capital available for add-on acquisitions. This year, the fund has made three investments; Father & Sons, a textile retail business; Ital Express, a spare parts dealer, and CEME, an electricity and cooling systems installations business. The companies in the current fund “are growing quite nicely”, according to the sources.

Azulis has so far made three exits from that fourth fund. The distributed to paid-in capital (DPI) for Fund IV currently stands at 25 percent, the sources added.

Azulis’s Fund V will be led by three new managing partners – Christine Mariette, Yann Collignon and Pierre Jourdain – since three of Azulis’s senior partners are retiring in the coming years. The firm’s current managing partner Franck Boget will retire in 2015, while the other managing partner, Michel Rowan, will retire after Azulis V’s investment period.

The three new managing partners have transitioned into their new roles since 2009. They have been with the firm for 20 years and worked together throughout. The three were part of Azulis's original incarnation, Banexi Capital Partners, which spun out in 2000 from Banexi, the captive investment arm of BNP Paribas. The team took full control of the management company in 2009, and rebranded the firm as Azulis Capital.

Azulis joins a number of French-based GPs on the fundraising trail. Last week, Idinvest Partners closed its latest debt fund on €235 million. In July, Keensight Capital held a €200 million first close on its fourth fund, which is aiming to collect €250 million by year end.

Meanwhile, Activa Capital is raising €320 million for its Fund III. The firm held a €200 million first close last December. Perceva Capital, a Paris-based turnaround firm, was nearing a final close on its second fund, PEI revealed in May, while in the large cap space, LBO France is attempting to raise €1 billion for White Knight IX.