Unigestion achieves first liquidity event for Emerging Manager II Fund following final close

Unigestion, a leading player in Europe’s private equity mid-market, has achieved a final close of its Emerging Manager Choice II Fund (EMC II) and the Fund’s first exit, providing a significant uplift and liquidity to investors.

Unigestion now has over €1bn of private equity assets dedicated to emerging managers. The asset manager has built a strong track record of investing in more than a hundred emerging managers over the past 30 years, backing the early funds of firms that are now regarded as industry leaders, such as Hg Capital’s Mercury funds, Archimed, Blackfin Capital and Vance Street Capital.

Unigestion launched its first pure-play emerging manager fund – EMC I – in 2018 and followed this with the launch of EMC II in 2022. Both funds have a remit to back spin-outs from established, hard to access GPs, as well as sector specialists applying differentiated strategies. They also target co-investments, late primaries and short duration funds in order to optimise net returns and the cash flow profile for investors. Both aim to deliver the performance and total expense ratio of direct funds, underpinned by strong risk management through diversification and selection.

EMC II, which is already 50% deployed, is likely to comprise 80-100 underlying companies over its investment period of three years through 10-12 fund investments complemented by 10-15 direct co-/secondary investments. Investments are balanced between European and North American managers, together with opportunistic exposure to APAC.

EMC II is already delivering on its no J-curve promise, having exited its J-curve six months after its first close and posting a TVPI of 1.46x gross (1.42x net) at the final close. This performance excludes the uplift that will be provided by EMC II’s first exit, signed earlier this week, from its co-investment in Spirii. The exit from this Danish software company, which provides the leading Platform-as-a-Service for EV chargers, has triggered a major liquidity event early in the Fund’s life.

Kim Pochon, Co-head of Unigestion’s emerging manager programme, said: “We are delighted that our offering for pure-play emerging manager funds has been validated through our Emerging Manager programmes, enabling us to attract both existing and new investors to this second fund. To be able to announce a significant exit for EMC II at the same time – generating an attractive uplift and liquidity for our investors – is also pleasing. It underlines the advantages of investing in the emerging manager space and our robust investment approach.

“Our research* shows that first-time funds hold up better than established funds in difficult market conditions. First-time managers are unencumbered by historical investments and so are laser-focused on their first fund. They are closely aligned with investors because they have a greater need to succeed than established managers – if they don’t make it, it is very hard to raise another fund. The challenges of the current market environment also help us as smaller funds can struggle with fundraising, positioning us as a key LP. This results in better visibility on investments and terms for our own LPs.”

Mark Zünd, Head of Private Equity at Unigestion, said: “The success of this fundraise, particularly given the current industry backdrop, demonstrates that LPs are increasingly recognising the benefits of investing in the rising stars of tomorrow. We have established ourselves as an ‘LP of choice’ for many emerging managers due to our value-add platform and, as a result, have developed a strong pipeline of investment opportunities. We are looking forward to completing the investment phase for EMC II, as well as seeking further exits, and preparing for the launch of our next EMC programme later in 2024.”

 

Ends

* Source: Preqin 31.3.23

 

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