Vitruvian closes on €925m

One of the most significant European buyout firms to launch in five years has made a compelling case to investors tired of megafunds to back Europe’s growth buyout segment.

Vitruvian Partners, a European growth buyout firm, has held a final close on its debut fund slightly ahead of its €900 million target after launching just over a year ago. The fund marks the return of Toby Wyles, the veteran Apax manager, to the market with a blue-chip spinout of star deal-doers and operators from Apax, BC Partners and Bridgepoint.

Vitruvian Man

The firm, named after the Leonardo da Vinci study in proportion and balance known as the Vitruvian Man, was the first spinout from Europe’s blue-chip buyout firms, since Harald Mix left Industri Kapital to found his own firm in 2003.

Wyles, who was with Apax for 13 years and co-head of its European leveraged team when he left in 2003, is one of three managing partners alongside Michael Risman, also a global equity partner at Apax until October 2005, and Ian Riley and a senior partner with rival firm BC Partners until he left in August 2003. 

David Nahama, a partner at Apax investing in venture deals and part of that firm’s technology and telco team, joined Vitruvian as a partner. Mark Hartford, a former chief financial officer at Bridgepoint, a European buyout group, was the final partner in the starting line-up. 

The firm has already made one investment in Latitude, a UK internet search marketing agency, in December last year.

Wyles told PEO: “We are delighted. But we are being careful. We told investors we wanted a final close around now with the market stepped down 30 percent; our competitors busy on portfolio companies and we’d have dry powder.”

“Be careful what you wish for. The market correction came through the credit crunch and not a GDP

Be careful what you wish for.

Toby Wyles

downturn.”

He said he was still hopeful that the decline in the market would create opportunities, but Vitruvian’s strategy was not dependent on it. “Most of our deals will have growth capital qualities and sub 50 percent gearing. We can deploy capital when others struggle.”

He also said the team’s experience would count in its favour in handling banks, which have become much more conservative. “We have gone seven or eight years backwards over night. Raising finance was never easy before and now again you need to make sure the bank is comfortable with the company, the sector and the management to get a deal over the line.”

Vitruvian’s focus on companies in dynamic situations with entrepreneurs pursuing strategic opportunities in sectors such as IT, media, financial and business services and leisure found favour with a diverse group of investors. They include pension funds, endowments and, according to one investor, even some of the banks hit by the credit crunch: RBS, HBoS and Citi.

Wyles said: “We are targeting the gap and a style of investing left by our old firms that have moved on to bigger deals.” The fund will make investments of between €15 million and €150 million in Northern Europe.

Monument Group advised on the placement of the fund.