Germany’s ECM hits Fund V hard-cap after ADIA hire

Mid-market investor ECM has held a final close on its latest fund’s hard-cap after appointing an executive from Abu Dhabi Investment Authority to bolster investor relations.

The firm, which amassed €325 million for German Equity Partners V, secured around a third of its commitments from US limited partners, including two state pension plans, an endowment and an asset manager, partner Bernard de Backer told Private Equity International.

Fund V, which launched in January, attracted the remainder of its capital from mostly European funds of funds and insurance companies, as well as a new Japanese institutional investor.

De Backer joined from the Gulf sovereign wealth fund in January after five years overseeing European fund commitments, he said. He had been senior portfolio manager at ADIA. His duties at the Frankfurt-based firm cover those of chief financial and chief operating officer, with particular emphasis on portfolio value creation, as well as serving as the firm’s sole investor relations executive.

“We’ve got a very strong constituent of investors coming out of the DACH region; that’s the biggest we have in the fund, with a strong base of Swiss fund of fund money,” De Backer added.  “We had sufficient demand on 3 May well in excess of the allocation we were looking for, so we allocated the fund in full [at that time] among the investors that had confirmed interest.”

ECM made an undisclosed GP commitment to the fund.

The firm targets businesses in German-speaking Europe with an enterprise value of up to €100 million, according to its website.

ECM collected €230 million for the 2012-vintage German Equity Partners IV, according to PEI data. It has drawn 88 percent of this capital across seven acquisitions and expects to “wrap up” the fund in the fourth quarter of this year, De Backer said.

The firm increased its focus on buy-and-builds for Fund IV and won’t activate fees on its successor fund until the existing vehicle has stopped making platform acquisitions in October.

The strategy is likely to be well-received by LPs. Some buy-and-build firms typically raise a successor fund at less than 75 percent deployed when all of the capital in the predecessor is committed to its platform investments, which can result in an overlap of three funds charging management fees at a time.