Five Arrows Principal Investments, Rothschild Merchant Banking‘s flagship private equity vehicle, has raised 508 million euros in the first close of its second European lower-middle market private equity fund. The target is 700 million euros. FAPI II’s limited partners include unnamed institutions, major family offices and high-net worth individuals.
Five Arrows Principal Investments (“FAPI”), the corporate private equity business of Rothschild Merchant Banking, is pleased to announce that it has completed the first closing of Five Arrows Principal Investments II (“FAPI II” or “the Fund”), its second European lower mid-market private equity fund, with total commitments exceeding €493 million. Including subscriptions from Rothschild employees which are currently in progress, FAPI II’s capital commitments stand at €508 million. This represents more than 70 percent of the Fund’s target size of €700 million, after only a few months of marketing.
The placement has generated strong traction from a diversified investor base comprising institutions, major family offices and high net worth individuals from around the world. The overwhelming majority of the commitments to date originate from existing investors in Five Arrows Principal Investments I (“FAPI I”) and other Rothschild Merchant Banking funds. Such endorsement from our existing limited partners is a testimony to the prudence of our investment strategy, the quality of the management teams we are backing and the demonstrated track record of earnings growth of our portfolio.
As was the case in FAPI I, FAPI II will continue to focus on the lower European mid-market and have a flexible investment mandate. The Fund will focus on sectors which we believe are comprised of defensive companies that have potential for secular unit volume growth. These sectors, inter alia, represent Healthcare, Education, Business Services, Software & Technology Services and select sub-segments of Consumer which have a proven history of successfully disrupting traditional consumer business models.
The FAPI I portfolio is comprised of 14 investments which are all robust business franchises in their respective niches, with attractive returns on invested capital. In addition, FAPI I has recently entered into an agreement to acquire Pirum Systems, a leading global financial technology business providing specialist post-trade solutions to the securities financing market, in what will be a primary buy-out. The completion of the acquisition of Pirum – which is expected imminently – will mark the last deal of FAPI I.
FAPI’s international investment team of 16 professionals is jointly run by Javed Khan and Emmanuel Roth, its co-managing partners who are based in London and Paris, respectively. The team draws multiple benefits from the strong backing of the Rothschild Group and, importantly, from the firm’s local industrial operator network. Local, grass-roots access at a pan-European level has proven to be a distinctive advantage for FAPI in sourcing and diligencing deals, as well as adding value post-investment.
FAPI is the flagship private equity vehicle of Rothschild Merchant Banking, the investment arm of the Rothschild Group. Over the last 5 years Rothschild Merchant Banking has grown assets under management to more than €3.4 billion, with a range of investment strategies stretching across the capital structure from private equity to private debt. This cohesiveness of investment propositions at Rothschild Merchant Banking makes it a preferred and value-added partner both for companies in need of financing and for private and institutional investors seeking to deploy capital across multiple strategies in the European mid market.
Rothschild is one of the world’s largest financial advisory groups.
There are four main arms to our business: Global Financial Advisory, Wealth Management & Trust, Institutional Asset Management and Merchant Banking.
Our Merchant Banking business deploys the firm’s capital, alongside that of trusted partners, primarily in European investment opportunities. We have developed a range of vehicles that allow us to respond to the capital needs of companies, through instruments ranging from senior debt to equity.
Our experienced team has the flexibility to invest with a wide range of partners including entrepreneurs, financial investors, families and institutions, and strives to support our portfolio companies through access to Rothschild’s global network of industry and sector expertise.
Today Rothschild’s Merchant Banking business manages more than €3.4 billion of funds globally.