Flexstone Partners (Flexstone), an affiliate of Natixis Investment Managers, has completed its 100th co-investment as it continues to expand its global, mid-market co-investment practice.
Flexstone has committed EUR6.3 million and reserved a significant amount of additional capital to support the next phase of growth of Pastas Gallo, alongside ProA Capital.
Pastas Gallo was founded by a Spanish entrepreneur and has become the market leader for dry pasta sales in Spain. It also sells pasta sauces, flours and breadcrumbs and is currently expanding into the ethnic dry chilled food market to tap growing demand for chilled ready meals.
Zélie Saint-Zéby, an investment Director in Flexstone’s Geneva office, says: “Pastas Gallo is a sweet spot mid cap investment for Flexstone, alongside one of Spain’s most successful managers. The company is a hidden gem with great production facilities and, according to our analysis, has the potential to add plenty of value. It is a family business where management can be strengthened and there are multiple levers of value creation including the development of the brand and launch of new categories, sometimes through acquisitions.”
Specific due diligence was conducted by an independent and specialised advisor to assess environmental, social and governance risks associated with the activities and production facilities of Pastas Gallo.
With over 100 co-investments completed since 2008, Flexstone Partners has demonstrated the strength of its global investment platform by increasing its capacity to access attractive private companies backed by small and middle market buyout and growth managers through its network of local offices in the US, Europe and Asia.
“Our co-investment approach is based on decades of investment experience, a large deal pipeline and a systematic, data driven selection process. Over time, based on our experience as well as academic research, we have developed and refined a proprietary “Sweet Spot” selection tool which, together with our detailed due diligence process explains the success of our co-investment practice,” says Eric Deram, Managing Partner at Flexstone.
Flexstone’s co-investing philosophy focuses on providing increased exposure to high conviction managers in their core areas of expertise in terms of core sectors, geographies, type of deals, or investment size bracket.
“This framework is a key element to strengthening our GP relationships and to delivering attractive risk-adjusted returns through negative selection risk mitigation,” says Deram. “All our mature co-investment vehicles rank first quartile in their category. In particular, our first quartile DPIs show our ability to deploy our clients’ capital and distribute profits in a time efficient manner.”
