PARIS--(EON: Enhanced Online News)--Eurazeo, one of the leading listed investment companies in Europe, continues to deploy its business model that combines own equity with selected co-investors. Eurazeo has announced today the launch of its new co-investment fund, Eurazeo Capital II, which brings assets under management to €6 billion, of which €1 billion are managed for third parties.
“Our proven ability to raise funds is yet another competitive advantage for Eurazeo. We will accelerate and pursue this strategy, which boosts our firepower, adds to our flexibility, and broadens our international exposure, by launching Eurazeo PME III in the coming months.”
Eurazeo accelerates the deployment of its model
Eurazeo is a long-term investor supported by a shareholder base of institutions and families. Its business model is characterized by equity investment and the absence of structural debt on its balance sheet. To broaden its scope of action, Eurazeo decided some fifteen years ago to syndicate equity stakes in the high-potential companies supported by its specialized teams to select investors on a strictly minority basis.
This approach is now being accelerated with the launch of Eurazeo Capital II, a €500 million fund subscribed by leading family and international institutional investors – pension funds, asset managers and sovereign funds – from Europe (73%), North America (15%), and Asia (12%), who support and fully validate Eurazeo’s investment strategy. The fund will have a minimum term of nine years and closed in December 2016.
Eurazeo Capital II coinvests with Eurazeo in high-potential companies
The funds raised will be invested in Eurazeo Capital’s most recent investments. This team supports companies selected for their growth potential each representing equity investments above €100 million.
Without impacting governance, the fund will take a 25% minority stake in Eurazeo Capital’s seven non-listed investments - Asmodée, Desigual, Neovia, Fintrax,1 Les Petits Chaperons Rouges, Novacap, and Sommet Education for €340 million – as well as the future company CPK, which will be created to acquire the Carambar, Poulain and Krema brands in the first half of 2017. The fund will retain the necessary financial flexibility, particularly to accompany their external growth.
Eurazeo has more than 10 years of experience in managing third-party funds
This fundraising confirms the ramp-up of Eurazeo’s third-party fund management activity. This approach was launched in 2002/2003 for the investments in Fraikin and Eutelsat and has continued ever since, particularly with the Eurazeo Partners and the Eurazeo PME I and II funds. At the same time, Eurazeo Patrimoine, the team specializing in real asset investments, has syndicated approximately 20% of Grape Hospitality, the hotel group created this year, for €31 million.
Overall, Eurazeo now manages third-party private equity funds with €1 billion in assets under management, including €500 million for Eurazeo Capital II, a balance of €305 million for Eurazeo Partners and €194 million for Eurazeo PME I and II. This increases the financial capacity of Eurazeo by more than 20% in relation to the NAV published on September 30, 2016.
Fundraising is a strategic initiative for Eurazeo
International fundraising expertise is integral to Eurazeo’s strategy:
> To generate recurring revenue streams. in the form of annual management fees, in addition to any performance fees relating to capital gains on asset disposals.
> To boost the investment capacity of Eurazeo and its flexibility, while continuing to be debt free, to allocate new resources to the portfolio companies, provide additional means to invest in other opportunities and thus diversify, and contemplate more substantial investments.
> To strengthen Eurazeo’s international ecosystem via long-term co-investment relationships with major international investors which generate opportunities for news investments and for partnerships for the portfolio companies.
Overall, taking into account the NAV as of September 30, 2016 (€4.8 billion), the Group manages and has invested nearly €6 billion, to which may be added over €1 billion of funds managed by Eurazeo’s associated platforms, Capzanine and IM Square.
Taking into account these transactions and the repayment of the AccorHotels debt in LH19 (the holding company carrying AccorHotels shares), Eurazeo’s net cash position is estimated at €998 million at year end.
Virginie Morgon, Deputy CEO of Eurazeo stated: “Our proven ability to raise funds is yet another competitive advantage for Eurazeo. We will accelerate and pursue this strategy, which boosts our firepower, adds to our flexibility, and broadens our international exposure, by launching Eurazeo PME III in the coming months.”
Frans Tieleman, Managing Partner - Head of Eurazeo Development declared: “We appreciate the trust of our investors who will share in the growth of our companies. This fundraising confirms our teams’ value creation methods and strengthens our network of long-term partners around the world.”
With a diversified portfolio of approximately €5 billion euros (~$5.2B) in diversified assets and €1 billion (~$1B) in assets under management, Eurazeo is one of the leading listed investment companies in Europe. Its purpose and mission is to identify, accelerate and enhance the transformation potential of the companies in which it invests. The Company covers most private equity segments through its four business divisions – Eurazeo Capital, Eurazeo Croissance, Eurazeo PME and Eurazeo Patrimoine. Its solid institutional and family shareholder base, robust financial structure free of structural debt, and flexible investment horizon enable Eurazeo to support its companies over the long term. Eurazeo is notably either a majority or key shareholder in AccorHotels, ANF Immobilier, Asmodee, CIFA, Desigual, Elis, Europcar, Fintrax, Grape Hospitality, Les Petits Chaperons Rouges, Moncler, Neovia, Novacap, Sommet Education, and also SMEs such as Colisée, Péters Surgical, and Flash Europe International, as well as start-ups such as Farfetch and Vestiaire Collective.
About Eurazeo North America
Headquartered in New York, Eurazeo’s North America office opened in September 2016 to identify, invest in and enable the growth of high potential U.S. mid-market companies in the consumer goods and business services sectors, as well as support the international development of Eurazeo’s portfolio companies. As a global long-term shareholder, the firm offers deep sector expertise, a gateway to global markets, and growth-oriented value creation to the companies it supports. The U.S. team, managed by Virginie Morgon, Deputy CEO of Eurazeo and President and CEO of Eurazeo North America, is comprised of five investment professionals and two senior advisors. To learn more, visit Eurazeo North America.
Eurazeo is listed on Euronext Paris. ISIN: FR0000121121 - Bloomberg: RF FP - Reuters: EURA.PA
For further information, please visit our website: http://www.eurazeo.com.
1 Eurazeo Capital II will initially acquire a 20% stake in Fintrax .