Cerea Partners completed the first closing of its fourth Mezzanine fund at the end of April. The Fund has reached more than 85 per cent of its target size, with an investment capacity of approximately EUR215 million exceeding the size of the third fund.
Cerea relied on the loyalty of its historical LPs, but also on the trust of new French and European investors. This round is mainly made up of institutional investors (banks, insurance companies…) but also includes a number of family offices.
This successful fundraising confirms strong investor confidence in Cerea Partners following its acquisition by its partners in 2019.
In line with Cerea’s three previous Mezzanine funds, Cerea Mezzanine IV will invest in French and European small and midcap companies involved in the food and beverage value chain (including ingredients, transformation, health/nutrition, distribution, catering, equipment, packaging, logistics, and other segments that are essential to the proper functioning of the entire value chain).
Limited Partners’ enthusiasm for Cerea Mezzanine IV Fund is primarily driven by the strong performance of previous vintages and a very low loss rate over the past fifteen years. Investors also appreciated the quality and experience of the investment team, spanning over several economic cycles, and the team stability, with the most senior partners having worked together for over 10 years.
In the current environment, investors have also been attracted by the consistency of Cerea Mezzanine funds, which derives notably from the resilience of the food and beverage sector and the distinctive features of Mezzanine products. Indeed Mezzanine debt returns being mainly contractual, this financing solution offers numerous protections, in particular against drops in valuation multiples. Like its predecessors, Cerea Mezzanine IV will nonetheless be able to capture additional value creation, for instance through warrants and minority equity stakes.
Investors also valued Cerea Partners’ ESG approach, which has been building up since 2010, notably with the recent launch of an ESG rating tool across all three Cerea Partners activities. Cerea Mezzanine IV Fund has ambitious sustainability targets focused on such themes as healthy food, sustainable production and responsible sourcing.
