LCF Rothschild Capital Partners, the French private equity firm backed by the Edmond de Rothschild Group, has held a first close of its debut private equity fund at E87m, with a E200m final close pencilled in for early 2004.
The Edmond de Rothschild LBO Fund, launched last October, received a E30m commitment from the firm’s sponsor, with additional commitments coming from French insititutional investors, large corporations and family offices. The firm has not disclosed the identity of the fund’s other LPs.
According to joint managing partner Eric de Montgolfier, who along with Erick Fouque joined the firm from Astorg Partners last year, the aim is for the second and subsequent closings to be made up of investors from the US and Europe. The firm has hired Altium as placement agent for the overseas fundraising.
The fund, which has a target of E200m, is expected to close at the end of 2003 or the beginning of 2004. “We are confident of hitting our original target, having secured a strong local following,” said de Montgolfier. “The fundraising process has been challenging but we are pleased with the outcome.”
LFC Rothschild is aiming to invest between E10m and E30m per transaction in traditional non-cyclical industries with an enterprise value of between E15m and E100m. The focus will be on build-ups and roll-outs, carried out in France or abroad by middle market French companies. “In terms of sectoral focus, we are particularly interested in business services, retail, light manufacturing, media and healthcare,” said de Montgolfier.
The firm is hoping to capitalise on the relatively less competitive French lower middle-market segment, where de Montgolfier believes there is more value to be added. “The small mid-cap sector is the most active in the French market at present. Dealflow is very good and the abundance of opportunities means that it is possible to be very selective about the businesses we look at. In the E15m to E200m sector in particular, there is a lot more to come.”
Following the first close, LCF will begin the process of making acquisitions, with de Montgolfier targeting two deal completions before the year end. The firm is sourcing its opportunities both through its own network of connections as well as through the Edmond de Rothschild Group.
The LCF team currently comprises five professionals, although the firm intends to appoint “three experienced professionals” in the coming months.