Investors clamour for Orlando fund

German special situations manager has closed its second fund without breaking into a sweat, while Jon Moulton’s distressed debt fund underlines appetite for turnaround deals.

Orlando Management,  a German private equity turnaround specialist, has closed its latest fund on €255 million ($329 million) after a fundraising by “invitation only”.

Christian Hollenberg: shot out the lights

According to a source close to the fundraising Orlando, headed by Christian Hollenberg, did not widely market the fund, Special Venture Partners II. Instead it invited its existing investors and a select number of new investors to commit to the new vehicle.

The source said Orlando could afford to pick and choose because its previous fund had “shot the lights out returning double-digit multiples on the cost of investment.” He said: “You give them €5 million and they gave you back €50 million.”

Its first fund raised €163 million having exceded its original target of €125 million. Orlando is looking to raise an Italian fund, which it hopes will replicate its success in Germany.

The latest fund attracted a mix of investors from both the US and Europe, including endowments, pension funds, financial institutions, fund of funds, and family offices.

Orlando will continue to focus on the acquisition of industrial German or German-speaking “Mittelstand” companies with sales in the range of €50 million to €500 million, with a healthy core, often profitable, but usually in a situation of underperformance.
Typical causes of such special situations include: past unproductive capital expenditure, uncontrolled expansion, insufficient cost control, unresolved succession problems, gridlock between management, shareholders and banks, and inheritance or estate tax issues.

MVision Private Equity Advisers served as financial advisor and exclusive placement agent to Orlando. Ropes & Gray acted as legal counsel.

Separately, Jon Moulton’s Alchemy Partners, has held a first close of its Special Opportunities fund on more than £200 million (€300 million). It will look to invest in distressed debt opportunities.