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Waterland closes third mid-market fund on €400m

Mid-market European private equity firm Waterland Private Equity has closed its third vehicle on €400m, more than double the size of its 2004-vintage predecessor.

Netherlands-headquartered mid-market private equity firm Waterland Private Equity Investments, has held a final closing of its third vehicle with €400 million ($508 million) of commitments.

Marketing for the new vehicle, Waterland Private Equity Fund III (WPEF III), began last November and the firm said that the fund was oversubscribed but that its partners had capped the fund at €400 million from the outset.

We saw the speed of application of our money from the last fund and there is an enormous amount of deal flow in the sector at the moment.

Rob Thielen, managing principal, Waterland Private Equity

Rob Thielen, managing principal at Waterland Private Equity, told PEO that the fund held a first closing of €250 million in early March 2006.

The new vehicle is significantly larger than its predecessors, with WPEF I closing on €50 million in April 2001 and WPEF II raising €170 million in April 2004. “The change in size does not reflect a change in strategy,” said Thielen. “We saw the speed of application of our money from the last fund and there is an enormous amount of deal flow in the sector at the moment.”

Thielen added that Waterland Private Equity has also increased the size of its team to 25 investment professionals and launched a German office last year. “The German team has only been in full force in the last few weeks and there are six investment professionals there now,” he said.

WPEF II is now fully invested in 11 platform businesses in three countries, according to Thielen. There have been no exits from the vehicle to date, but the firm has carried out a number of recapitalisations, he added.

Thielen: new German office now in ’full force’

WPEF III will make controlling investments in medium-sized companies in the Rheinland region (comprising the Netherlands, Belgium and Germany) with revenues between €10 million and €150 million. As with previous funds, Waterland’s preferred strategy is to buy and build in fragmented sectors.

Thielen said that the approximately 60% to 70% of existing investors re-allocated to WPEF III, including ATP, JP Morgan and Delta Lloyd. New limited partners included BP Pension Fund, Rothschild and LGT Capital Partners. Around 25 percent of commitments came from the US, said Thielen, with the remainder coming from Europe.

As with WPEF II, MVision Private Equity Advisers acted as global placing agent on the fundraising for the latest vehicle.