Golding holds first close of first dedicated buyout co-investment fund at EUR161m
Golding Capital Partners has has held first close of its co-investment fund, Golding Buyout Co-Investment 2020, with capital commitments of EUR161 million.
The asset manager for alternative investments has thus been able to place three quarters of the target volume of EUR200 million with investors – primarily pension funds and insurance companies – within just a few months. With its first dedicated buyout co-investment fund Golding is seamlessly following on from the fund-raising success of previous buyout products. At the beginning of the year “Golding Buyout 2018” held its final close with a record volume of EUR375 million.
Golding Buyout Co-Investment 2020 continues to pursue the investment strategy launched back in 2015, with a focus on companies with proven business models in defensive sectors, such as health and technology, with conservative capital structures in Europe and North America. Despite this defensive orientation, the fund aspires to a net target IRR of 13-15 per cent. The final closing is scheduled for the end of 2021.
“In spite of the general yield compression, we believe that we can still identify attractive investments for our investors. We are constructing a hand-picked portfolio of companies with sustainable growth – both organic and through buy-and-build strategies. One of our earlier investments has accelerated their growth strategy with our investment and is already involved in advanced discussions regarding a possible IPO, thus providing early proof of the attractiveness of our investment strategy,” says Daniel Boege, Partner and Head of Buyout at Golding.
As with previous buyout products, diversification is also at the core of the investment strategy for Golding Buyout Co-Investment 2020. Investment risks are spread multi-dimensionally, across various geographies, economic sectors and individual companies. At this early stage, the fund has already invested in ten companies, meaning that 40 per cent of the target portfolio has already been allocated. The majority of these investments have been executed with partners with whom Golding has already successfully cooperated in the past. The fund is expected to be fully deployed by 2022 in over 20 portfolio companies.
ESG (environmental, social, governance) criteria are an important aspect of the portfolio construction for “Golding Buyout Co-Investment 2020” at both the target fund manager as well as individual company level. Golding focuses on opportunities that provide tangible positive contributions on ESG matters. As an example the fund is invested in a company distributing drinking water solutions for businesses which provide significant CO2 footprint improvements due to reductions in water logistics.
“The sustainability and impact area is quite rightly very important for our investors. This is why we do not solely rely on the due diligence of target fund managers, but carry out an additional separate assessment by our own team. For us a strong fund performance encompasses not just risk and return but quite clearly also includes the ESG components,” explains Dr Matthias Reicherter, Managing Partner and Chief Investment Officer at Golding.
The Golding investment team has over 200 years of combined experience in the buyout segment and has completed as many as 136 investments with more than 1,700 individual transactions since 2000. Golding currently administers around EUR1.9 billion in assets in buyout products.