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747 Capital tops target for fund aimed at lower-middle-market GPs

  • Firm: 747 Capital
  • Fund: 747 Stuyvesant V
  • Target: $75 mln
  • Amount raised: $83 mln

747 Capital beat its target by $8 million, or more than 10 percent, with an $83 million closing for its fifth fund-of-funds dedicated to the lower middle market, an executive at the firm said.

Co-Managing Partner Marc Der Kinderen said the 15-year-old New York firm plans to stick to fund sizes of $50 million and up to $350 million, but no larger, as it taps Fund V for primary, secondary and co-investments.

The firm plans to come back to the market with 747 Stuyvesant VI in late 2017, he said. He didn’t mention a target.

Der Kinderen, who co-founded the firm with Gijs Van Thiel, co-managing partner, said the universe of lower-middle-market firms numbers around 600, with about 100 launching fundraising efforts each year.

The firm sees more potential in smaller buyouts. “With businesses with enterprise values below $100 million, or even below $50 million, there’s more opportunity to buy right and still add substantial operational value,” Der Kinderen said.

747 remains “totally agnostic” about sector and style. “We’re focused on the GP and the team, and their unique way to create value,” Der Kinderen said.

Nowadays, more firms offer access to niche positions in the marketplace. “Specialization is becoming more and more important, whether it’s healthcare, consumer … it may be focused on high growth companies, or distressed assets,” he said. “We also see more focus on growth equity, combined with buyouts. It used to be more separate.”

747 Capital now manages about $325 million. The firm’s Fund IV closed on $63 million in 2013.

747 Capital takes its fund name from Peter Stuyvesant, the governor of New Amsterdam, the predecessor of New York in the 1600s. Both Van Thiel and Der Kinderen previously worked at Dutch firms.

The name “highlights our roots in both the U.S. and the Netherlands. Plus it’s representative [of] our investor base, which is both European and domestic,” Der Kinderen said.

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Photo of Marc Der Kinderen courtesy of 747 Capital