Flexstone Partners’ Global Opportunities IV, has attracted USD322 million of commitments after a first close in November 2020 and has already completed three investments.
Like its predecessors, the fund is backed by long-standing Flexstone Partners investors, including Natixis, as well as new, top-tier Institutional investors in Europe, Australia and Asia. The fund will make more than 40 investments in privately-owned companies across the world alongside high conviction managers.
With a focused investment strategy – providing increased exposure to high conviction managers in their core areas of expertise – Global Opportunities IV will follow the same strategy and selection processes as its predecessors which all delivered top-quartile track-record2 with significant risk mitigation (loss ratio <4 per cent over 104 co-investments concluded to date).
“We believe that Global Opportunities IV represents an attractive risk and return investment opportunity for our investors, especially in the current uncertain environment when investors continue to look for yield. Through our proprietary and systematic selection process and thanks to the quality and diversity of our deal flow, we have been able to generate top quartile private equity returns associated with low risks since we started our co-investments fund series in 2008,” says Eric Deram, Managing Partner at Flexstone Partners.
Global Opportunities IV has already completed investments in three companies:
• A leading direct to consumer weight loss and wellness brand in the US. The investment rationale is based on attractive and stable industry dynamics, growth opportunities, return characteristics and investment with a lead sponsor that has successfully implemented a similar playbook in prior investments.
• A non-asset-based US freight broker providing full truckload, less than truckload, temperature controlled and flatbed services. The investment aims to leverage the management team capabilities to grow the business both organically and through targeted acquisitions that fit the model and culture.
• The second largest vertically integrated funeral services operator in France, operating in a non-cyclical sector with solid underlying growth fundamentals. The operational value creation plan is based on further network densification in France with a planned expansion in neighbouring countries.
“We have seen a strong deal pipeline, with a fourth investment, subject to final closing by the beginning of May. This will further complement the portfolio with a leading provider of ophthalmology services for the NHS in the UK, a non-cyclical and growing sector,” says David Arcauz, CFA, Managing Partner at Flexstone Partners. “The GP we are co-investing with is a healthcare focused UK mid-market fund manager with a deep track record in care services and experienced with NHS regulation. In addition, the transaction metrics are attractive, with a reasonable entry price given the sector and a limited financial leverage.”
“These four investments are a very good start for Global Opportunities IV and they all fit within our long-tested investment strategy and our rigorous “sweet spot” selection criteria,” says Nitin Gupta, Managing Partner at Flexstone Partners. “We co-invest with top-quartile performing GPs, who have a demonstrated specific expertise in the deals we invest in and create value primarily through operational improvements. In times of dislocation and, within certain sectors, a high valuation environment, having a well-defined investment strategy and the discipline to stick to a time-tested selection process is ever more critical to deliver attractive returns while mitigating risks.”
Global Opportunities IV is an Article 8 Fund according to SFDR regulation in European Union, and is implementing a rigorous Environmental, Social and Governance process for all its investments.
