Firms & Funds

Novalpina plans large GP commitment to 1 bln euro debut

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Novalpina Capital, private equity, TPG, Stephen Peel
Photo of Stephen Peel courtesy of Lenta.
  • Novalpina plans 75 mln euro GP commitment
  • Debut fund targets 1 bln euros
  • Oregon backs Novalpina for up to 200 mln euros

The team at Novalpina Capital plans to commit 75 million euros ($87 million) to its debut fund, which is targeting 1 billion euros, according to Oregon Investment Council documents.

The council, which oversees the state’s $74.9 billion retirement fund, agreed to commit up to 200 million euros to the fund at its Nov. 1 meeting. The commitment remains subject to final negotiation of terms and conditions.

Limited partners typically view larger GP commitments favorably, as it aligns the partners’ long-term compensation with the fund’s performance. Should Novalpina Capital Partners I hit its 1 billion euro target, the team’s GP commitment would stand at 7.5 percent.

More than 80 percent of international buyout GPs commit 5 percent or less to their funds, according to Buyouts Insider’s 2016-2017 PE/VC Partnership Agreements Study.

“Legal negotiations are not yet final, but staff considers Fund I terms attractive,” a memo in the investment council’s meeting materials says.

Novalpina will use its debut fund to acquire mid-market and upper-mid-market companies based in Western Europe, typically those with enterprise values of 200 million to 500 million euros, the memo shows.

The firm plans to use “cutting edge data science techniques” to improve operations early in the life of their portfolio companies’ investments, which Oregon staff considered “relatively novel” for PE, the memo says.

Novalpina Founding Partners Stefan Kowski, Bastian Lueken and Stephen Peel previously worked together at TPG. Peel co-led TPG Capital’s Asian and European investment efforts from 1997 to 2014, Buyouts has reported.

While Novalpina is a first-time fund, Oregon staff gave a glowing assessment of the founders’ collective track record. “First time fund risk is unavoidable when backing emerging managers, but very few emerging managers are led by a founding team as experienced and accomplished as Novalpina’s,” according to the memo.

The firm did not respond to a request for comment.

Action Item: For the Oregon memo, visit http://bit.ly/2lYf19F

Photo of Stephen Peel courtesy of Lenta.