LPs

LACERS goes euro with Gilde commitment

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The new 20 Euro banknote featuring new security characteristics is presented under UVA light at the French national bank in Paris, France, November 24, 2015. REUTERS/Philippe Wojazer - RTX1VL4O
  • Firm closed on 1.1 bln euros in November
  • European specialist charging 1.8 pct management fee
  • Crisis-era Gilde fund top quartile with 11.4 pct IRR

The Los Angeles City Employees Retirement System formed a new relationship with Gilde Buy-Out Partners, a European middle market firm that recently closed its fifth fund on its 1.1 billion euro ($1.17 billion) hard cap. LACERS committed 23 million euros to the fund, according to pension documents.

The firm will use Gilde Buy-Out Fund V to make control investments in companies based in central Europe, including businesses in The Netherlands, Belgium, Luxembourg, Germany, Austria and Switzerland. The fund will make between 20 and 40 investments, with the ability to commit up to 120 million euros per deal, according to LACERS documents.

The strategy is consistent with Gilde’s previous funds. Fund IV, a 2011 vintage, netted a 6.9 percent internal rate of return through March 31, according to LACERS documents.

Older vintages performed stronger – the firm’s 2000 vintage fund was netting 26.8 percent with a 2.7x multiple as of the same date. Its financial crisis-era Fund III returned 11.4 percent with a 1.9x multiple, good for top quartile among 2006 vintages.

MVision Private Equity Advisers worked as a placement agent for the fund.

Gilde will charge LPs a 1.8 percent management fee on committed capital during the fund’s investment period. LP management fees fall to 1.8 percent the acquisition cost of the fund’s unrealized assets when its investment period concludes, or as soon as Gilde begins collecting management fees on a newer vintage fund.

The GP will provide approximately 3 percent of the fund’s investment capital, according to LACERS documents. Gilde will collect 20 percent of Fund V’s carried interest over an 8 percent preferred return.

Gilde is chaired by Ralph Wyss. The firm maintains offices in Germany, Belgium, Switzerland and The Netherlands.

Action Item: For LACERS’ report on Gilde, click here: http://bit.ly/1NBDuXX

Photo courtesy of Reuters