Rothschild cranks up $250m Winch fund

LPs’ recognition of French SMEs’ development capital needs meant Winch Capital 2 was able to close ahead of schedule, said president Pierre-Michel Passy.

Edmond de Rothschild Investment Partners has wrapped up fundraising for its second development capital fund in less than eight months.

Having begun marketing in April, the French growth capital investor had hit its hard cap of €250 million in November. It had expected a final close in early 2010.

Pierre-Michel Passy

Unlike with the previous Winch fund, which closed on €165 million, the firm decided not to raise the hard cap.

The Paris-based firm, which is part of the LCF Rothschild banking group, is led by president Pierre-Michel Passy and now has funds under management of €775 million across development capital funds, life sciences funds and so-called “innovative investment” funds.

Winch Capital 2 will follow its predecessor’s strategy of investing in profitable companies with sales of between €20 million and €250 million.

Around 90 percent of the fund’s limited partners are domestic French investors, Passy told PEO. These include fund of funds investors Fondinvest, AGF Private Equity, SGAM Private Equity and Dahlia.

Prédica, the life insurance arm of Crédit Agricole, and Crédit Mutuel Arkéa, a French cooperative bank, are also among the LPs.

Parent company LCF Rothschid committed less than 10 percent of the capital.

“The new institutional investors were won over not only by the team and the relevance of its approach, but also by the economic interest of capital development at a critical juncture when French SMEs need to strengthen their capital bases and finance their growth,” said Passy.

The fund has not yet deployed any capital, but is likely to complete one investment before the year ends.