Eurazeo has officially closed its largest flagship buyout fund — Eurazeo Capital V—at €3 billion. This sum surpasses the 2019 predecessor by €500 million and showcases the firm’s commitment to scaling global investment opportunities. Despite economic headwinds, Eurazeo’s robust fundraising signals that institutional backers are still eager to invest in Europe’s mid-market private equity space.
Confidence in Mid-Cap Opportunities
Mid-cap funds often carry unique advantages. They cater to companies with strong growth potential, yet remain more adaptable than larger enterprises. Eurazeo Capital V aims to capitalize on this sweet spot by targeting mid-cap businesses across Europe and North America. According to a firm statement, potential sectors range from tech-enabled business services to financial services, healthcare, and life sciences.
Half the Capital Already At Work
Eurazeo disclosed that around half the newly raised capital is already deployed. Investments span six companies, with recent acquisitions including Mapal, a software provider that serves the hospitality industry, and Eres, a French fintech. This active pace reflects Eurazeo’s strategy of selecting businesses that can benefit from digital initiatives, operational improvements, and international expansion.
A Renewed Appetite for European Mid-Market Funds
Fund V secured capital from a diverse mix of institutions: insurance companies, sovereign wealth funds, banks, pension funds, asset managers, family offices, and private investors across the US, Europe, and Asia. Industry watchers note that the European mid-market space saw renewed investor interest in 2023 and 2024, driven by a belief that this segment could yield higher returns while encountering less volatility.
Backing from Established Names
Private Equity International data indicates that Adams Street Partners, Lexington Partners, and StepStone Group backed the previous Eurazeo Capital IV. While the firm did not reveal the target or hard cap for Fund V, it is believed to be in a similar range. Ultimately, the final close at €3 billion reflects Eurazeo’s growing clout among leading limited partners.
Team Contributions and Alignment
Eurazeo’s mid-large buyout team contributed over €50 million to Fund V—its largest team commitment to date. This move underscores a strong alignment of interests, as firm leaders have significant “skin in the game.” By investing alongside LPs, Eurazeo fosters a relationship of mutual trust and confidence in the fund’s investment strategy.
Building on EC IV’s Success
Eurazeo Capital IV showcased solid performance and healthy distributions to paid-in (DPI) metrics. Half of the prior vehicle’s portfolio companies have already been exited, delivering a 1x DPI for investors. According to managing partner and co-head of Eurazeo mid-large buyout, Maxime de Bentzmann, the strong liquidity profile and strategic asset selection boosted fundraising efforts for Fund V.
Market Uncertainty and Deal Environment
Despite optimism in 2023 and beyond, market volatility remains a factor for private equity firms. Process uncertainty can pose challenges when launching new deals. Managing partner and co-head of Eurazeo mid-large buyout, Eric Sondag, noted that deal volume could be influenced by day-to-day volatility and macro events. Still, the firm expects continued opportunities for both acquisitions and exits, especially when focusing on assets with strategic value.
Exits and Value Creation: Top of Mind
Exits remain a priority this year. Eurazeo is heavily focused on leveraging its “large-cap resources” within the mid-market. That means deploying extensive operational, digital, and financial expertise—starting from day one of any investment. By implementing strategies such as incremental M&A, global reach, and tech upgrades, Eurazeo aims to unlock transformational growth.
Looking Ahead
Eurazeo’s €3 billion close on its flagship buyout fund underlines a broader trend: institutional investors are not shying away from Europe’s mid-market private equity scene. With half of its capital already deployed, the firm has wasted no time in seizing high-potential opportunities. As LPs look for stability and growth, it appears Eurazeo has positioned itself well to navigate market complexities and deliver notable returns.
