Halder Fund IV Enjoys Strong Deal Flow

Halder Holdings of the Netherlands has not let the grass grow under its feet since closing its fourth LP fund on DFl 253 million (euro 115 million) in the second half of 1998. Approximately 30% of Halder Investments IV has been deployed to date in five buyouts and two replacement capital investments in the Netherlands, Germany and Belgium. Managing director Paul Deiters said the fund’s two largest investments so far are the buyout of Essanelle, one of Germany’s largest hairdressing chains, and Euretco of the Netherlands, a retail purchasing and distribution group, where Halder acquired equity from a number of existing shareholders.

Like its DFl 165 million 1992-vintage predecessor, Halder Investments IV will focus on middle-market companies in the Benelux and German markets, sourced through its offices in Frankfurt, Antwerp and the Hague, although a small proportion of the fund – perhaps 10% – may be invested in funds elsewhere in northern Europe. Paul Deiters said Halder expects German companies to account for between 55% and 60% of Halder Investments IV’s portfolio, while the Benelux component is likely to be weighted towards the Netherlands. This bias will reflect the markets’ relative sizes rather than the quality of opportunities Halder has identified. Paul Deiters said that the 14 or so Belgian deals Halder has completed since 1986 have generated higher returns than either its Dutch or German deals.

Mid-market deal flow is strong throughout Halder’s target region, Paul Deiters said; although the German market, in particular, is becoming increasingly competitive, the mid-market is less affected than the larger deals sector. For a mid-market operator, a local presence in its target markets is crucial, as illustrated by one of Halder’s recent German investments. Paul Deiters said Halder first contacted the company’s family owners some three years prior to completing the deal and was the only private equity house to have dealt with the target company during the intervening period.

Halder has historically enjoyed strong support from institutions in its domestic market, and 58% of Halder Investments IV was drawn from sources in the Netherlands. A further 24% was committed by investors from Germany, Switzerland and the UK; two US investors provided the balance. The 15-strong LP line-up includes Agfa,

BancAmerica Capital Corp., Bank Vontobel, Bell Atlantic Asset Management and the PGGM pension fund, while the Halder managers themselves committed 5% of the fund’s total.