Rothschild closes development capital fund on €300m hard-cap

The Paris-based firm could have collected up to €400m for the oversubscribed Winch 3 fund

Edmond de Rothschild Investment Partners, the development capital arm of the Edmond de Rothschild Group, has closed its latest fund, Winch Capital 3 on €300 million in a first and final close.

The fund, which came to market last October targeting €250 million, was oversubscribed and could have raised as much as €400 million, Pierre-Yves Poirier, a partner at the firm, told Private Equity International.

Twenty-three institutional investors in Winch Capital 2 reinvested in Winch 3 with a reinvestment ratio of 140 percent, the firm said.

The fund also attracted new investors including the European Investment Fund (EIF) and SOGECAP, the life insurance group of Societe Generale Group. 10 institutional investors invested more than EUR €15 million each, including the Edmond de Rothschild Group and Bpifrance, BNP CARDIF Assurances and CNP Assurances.

The fund also saw “strong interest” from individual investors and family offices, representing close to 10 percent of the fund, the firm added.

The firm expected that some of the large insurers would be affected by the Solvency II regulations which would make it difficult to invest in their latest fund, but Solvency II turned out not to be much of a problem, Poirier said. “Their main problem was to be able [to find a good strategy that would provide them with] diversification. [All told,] private equity is still good for insurance companies,” he said.

Winch Capital 3 will focus on investing in French companies with international exposure, the fund mandates that two-thirds of the portfolio must consist of French companies with international activities.

Edmond de Rothschild Investment Partners expects Winch Capital 3 to build a portfolio of about 15 companies investing between €7 million and €25 million in each company. This fund has already made its first investment in Altand, a real estate company, Poirier said, adding that the firm is likely to do two or three of investments this year.

The firm’s debut fund, Winch Capital, which raised €165 million in 2005, is already two-thirds divested, with four portfolio companies left in the portfolio, he said. The fund’s prior fund, Winch Capital 2, which closed on €250 million in 2010, is fully invested. So far the firm has secured one exit from that vehicle.