Manager targeting mid-market buyouts in northern Europe
10 transactions completed, with 50% of fund already invested at final close
Tech roll-out and buy-and-build the foundations of value creation
UPDATE: This story has been updated to include comments from the fund’s co-founder and provide further details on acquisitions and add-ons.
Sept 22 (Preqin News) - France-based mid-market private equity firm Adagia Partners has secured €1.1bn in commitments in its first-ever fundraising, exceeding an initial €750mn target despite the challenging market for new funds.
Adagia Capital Europe SLP secured commitments from almost 40 blue-chip institutional investors, insurance companies, banks, sovereign funds, funds of funds, pension funds, and foundations from Europe, the Middle East, and the US, as well as family offices and private individuals. Campbell Lutyens acted as placement agent.
The successful final close reflects that, despite the tougher environment across private markets, there is still demand for emerging managers who have a strong track record and a clearly defined strategy.
“The three founders have track records going back 25 years of investment across a number of cycles,” co-founder Sylvain Berger-Duquene told Preqin News. “Half the partners have an operating background and we have a sector focus and a very active, hands-on approach. We are duplicating in the mid-cap space what is done by the best large buyout firms.”
The Paris-headquartered manager targets mid-cap buyouts with an enterprise value of €150–600mn in France, Germany, Switzerland, and Benelux countries. It focuses on healthcare, business services, and tech industries, with a value-creation strategy supported by technology roll-out and buy-and-build.
The new manager demonstrated its ability to find and complete investments while the fundraising process was underway, completing three acquisitions and seven add-ons in the last 12 months. It has acquired Schwind, an eye health diagnostic and surgery device developer; Adhetec, a provider of adhesive solutions in aerospace; and Minlay, a manufacturer and distributor of dental prostheses. Around 50% of the fund had already been invested at the final close.
“We held a first close after making our first investment,” said Berger-Duquene. “Since then, the portfolio has been growing EBITDA at 25–30%. This was crucial to us as an emerging manager – we didn’t have a choice, we had to demonstrate a track record.”
Adagia was co-founded in 2020 by Berger-Duquene, who was previously at Astorg, Montagu Private Equity, and CALYON. The other co-founders are Charles-Eduoard Bouée, former CEO of consultancy Roland Berger, and Nicolas Holzman, a former partner at PAI. Adagia’s team comprises 26 professionals boasting a mix of investment and operational backgrounds.
The firm has prioritized environmental, social, and governance (ESG) issues, saying that “long-term value creation can only be achieved through sustainable operations”. It aims to reduce carbon emissions at portfolio companies by improving energy consumption, procurement, transportation, and supply chains, and aims to meet the targets of the Gender Equality France Invest Charter, as well as promote ethical sharing of value created within portfolio companies. It publishes its ESG policy and is a signatory of the UN Principles for Responsible Investment (UNPRI), with a rating of 51% on Preqin’s Transparency KPIs, ahead of the average of 34% for Europe-based managers.
Correction: This story has been corrected to show that Adagia was founded in 2020, and not 2000, as was originally reported.
The opinions and facts included within the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin providing the information in this content accepts no liability for any decisions taken in relation to the above.