Iberian private equity fund manager Sherpa Capital has reached a final close of €120 million for its new fund Sherpa Special Situations III.
It is Sherpa Capital’s fourth fund and follows special situation vehicles Sherpa Capital I and II, and the Sherpa Capital private equity fund.
Sherpa Special Situations III plans to make between eight and ten investments, writing equity tickets of between €10 million and €25 million in companies with a turnover of between €20 million and €300 million.
A Sherpa Capital statement said it was the “first private equity fund close in Spain since the start of the Covid-19 crisis”. It added that, around 75 per cent of the commitments have been made by institutional investors from Europe and North America, most of whom had previously invested in Sherpa’s earlier vehicles.
The statement added: “Reaching a final close during a turbulent market context has been made possible thanks to the track record of the firm, which has historically generated above-market returns, even during the financial crisis of 2008. As a result, the fundraising process began and concluded in just a few weeks.”
Sherpa said the investment strategy of Sherpa Special Situations III would be focused on companies “facing transformation situations due to the economic environment or as a result of some extraordinary situation of a strategic, operational, financial or shareholding structure nature”.
The fund will invest both in family businesses as well as in divestitures of large groups and in companies going through insolvency or bankruptcy proceedings. The fund also has the capacity to make debt investments in ‘loan-to-own’ transactions.
With the closing of its fourth fund, Sherpa Capital has assets under management with a total value of €500 million.
Eduardo Navarro, executive president and founding partner of Sherpa Capital, said: "The launch of Sherpa Special Situations III comes at a time in which companies are looking for partners who can bring liquidity and experience managing transformation situations such as the ones that many businesses are experiencing due to Covid-19. Our plan is to continue with the successful strategy of the predecessor vehicles, getting involved with the management teams of the portfolio companies and generating attractive returns for our investors. In that sense, our firm will continue to promote value creation through transformation plans, fostering sales growth and improving operational efficiency".
Alfredo Bru, founding partner of Sherpa Capital, said: "Our extensive accumulated experience in different economic sectors of the Iberian market allows us to support our investee companies to transform their businesses and overcome their liquidity problems in the current environment. Both in Spain and Portugal, there still exist many companies that are currently looking for a partner to support them in facing the current challenges”.
Meanwhile, Jorge Fernández Miret, partner of Sherpa Capital, commented: "As a result of the current situation, the number of companies looking for a partner like us has increased significantly. We have already identified several very interesting investment opportunities, so we expect to complete a number of transactions with our new fund throughout 2020".