Investindustrial closes €100m annex

Limited partners will have enhanced influence over how the 'build-up' capital is deployed.

Investindustrial, a Southern European buy-and-build specialist, has raised €100 million – largely from existing investors – to fund the expansion of existing assets within its portfolio.

The annex fund will be used to execute buy-and-build acquisitions for companies owned by Investindustrial’s €500 million 2005 fund. The firm has already identified a number of “attractive targets” for such investments during 2009 and 2010, the firm said in a statement on Thursday.

As earlier reported by PEO, the annex fund is understood to have an innovative structure whereby limited partners have greater transparency and power as regards the fund’s investment decisions. While the precise details remain unclear, one source said the fund is structured so that GPs and LPs are “working together as partners”, giving LPs the power to vote against transactions, as opposed to the typical GP-LP relationship that entrusts GPs to make all investment decisions.

The firm was unavailable to comment on the fund terms at press time.

Lenient terms for limited partners are likely to be a popular feature of annex funds – pools of capital raised in order to invest in an existing fund’s portfolio.

“We definitely do not support structures in which managers simply want to add a little more commitment to the pool and quickly move on,” one prominent LP recently told sister publication Private Equity International. “We really push hard for new terms for the annex capital – terms which are distinguished from the initial investment and recognise the return requirements of today.”

MVision Private Equity Advisers was the fund's placement agent, while SJ Berwin acted as legal counsel.