Earlier this summer, Eurazeo completed a final close of Eurazeo Private Debt VII (“EPD 7”) at €3.9bn after 30 months in the market.
The latest fund was a 70% increase on EPD 6, which closed in 2023 at €2.3bn. Around €1.6bn was raised in sidecar vehicles as well, bringing the platform total to €5.5bn.
Wealth investors accounted for close to €1bn of the platform total.
The fundraise marks almost two decades for Eurazeo investing in companies with €5m - €25m EBITDA. The firm sees 700 transactions per year and makes 20 to 30 investments.
“The strategy has changed a lot,” says Francois Lacoste, Managing Partner for Private Debt at Eurazeo. “When we started back in 2007, our activities were more focused on junior, mezzanine financing. Today, it's more than 95% senior secured loans.”
Remaining focussed on smaller companies within Europe’s lower middle market has paid off, with a significant number of re-ups across vintages. Each fundraise has been bigger than the last with the latest being no exception.
Eurazeo says a number of investors in the latest fund have been LPs since EPD I was launched in 2007. The insurance company AXA France committed anchor capital to deploy directly into the early underlying private debt strategies.
After a fast first year that saw €2.5bn raised, the final €1.4bn took a further 18 months, as Eurazeo sought to protect the fund’s size.
Francois Lacoste, Managing Partner for Private Debt, Eurazeo
“We turned down commitments from some new investors, as well as requests from existing LPs to increase their allocations, as we did not want to compromise on the fund’s size,” said Lacoste. “While this was understandably disappointing for some investors, the decision was generally well received and seen as a sign of our commitment to maintaining investment discipline and protecting investments in the fund.”
Flagship fundraising pace EPD VII versus EPD VI
|
Milestone |
EPD VII |
EPD VI |
|
Total Time In Market |
30 months |
Approx 28 months |
|
First 9 Months (through Sep '24) |
EUR1.4 billion |
N/A |
|
First 12 Months (through end-24) |
EUR2.5 billion |
First 12 Months (mid-2022): > EUR1.1 billion |
|
Final Close |
EUR3.9 billions (June 2026) |
EUR2.3 billion (November 2023) |
International investors accounted for more than 60% of commitments in EPD 7, confirming a growing appeal among investors in North America and Asia. Since EPD 5, Eurazeo has seen its investor base in Asia enjoy meaningful growth, including insurance companies in Japan and Korea as they seek diversified exposure to European private debt.
IR Leadership
Eurazeo has investor relations professionals in Shanghai, Singapore, Hong Kong, Korea and Japan.
Lacoste believes Asian investors were now seeing Europe as complementary to their US exposure. “The tension between Asia and the U.S. due to the tariffs has impacted the mindset of some investors. While they remain invested in the U.S. they understand that Europe’s lower mid-market could be something interesting.”
Mathieu Teisseire leads the global investor relations team from Paris, with Julien Trezza as Managing Director. In total, the team comprises 30 professionals; more than 15 are based in Europe, with 10 located in Asia.
Peer comparison
Eurazeo’s peer group includes Apera, BlackRock, Arcmont, Barings, Investec, Pemberton and Muzinich & Co, all of whom lend to European mid-market companies.
GPs operating a regional-focused strategy, typically from smaller funds, include Armada, which lends to companies with EVs of less than €150m in the Nordics and DACH, CIC Private Debt, which invests in France and DACH, and Dexteritas, which lends mainly in the Netherlands, as well as Germany and Belgium.
