IK Investment Partners (IK), a Pan-European private equity firm, has closed the IK Small Cap III Fund (IK Small Cap III) at its hard cap with commitments of EUR1.2 billion.
The IK Small Cap III Fund was significantly oversubscribed and allocated exclusively to existing IK platform investors in just three months, having been raised on a fully virtual basis.
The Fund is more than double the size of its EUR550 million predecessor, IK Small Cap II Fund, and was raised exclusively with the support of existing investors across the IK platform.
IK Small Cap III will continue to employ the same investment strategy focused on growing businesses across IK’s core sectors of Business Services, Healthcare, Consumer and Industrials and will make investments in companies with enterprise values of between EUR50 million and EUR150 million. The Fund includes a dedicated Development Capital pool which will focus on investing in smaller companies valued up to EUR50 million, in line with IK’s original Small Cap I Fund strategy.
IK launched its Small Cap strategy in 2015 and has since made 27 platform investments across two funds. The EUR277 million IK Small Cap I Fund has realised EUR425 million of proceeds, including seven full exits at a gross average 3.2x MM and 56 per cent IRR.
IK Small Cap III will continue to support businesses through its active ownership model focused on organic growth, international buy-and-build, professionalisation and operational improvement. The IK Small Cap team of 30 investment professionals located across Amsterdam, Copenhagen, Hamburg, London, Paris and Stockholm will be supported throughout the investment process by IK’s dedicated Operations and Capital Markets teams.
The closing of the Fund follows a period of significant fundraising for IK, which has held a final close on funds with over EUR4.3 billion of commitments in the last 12 months, reflecting continued investor confidence and support despite the ongoing pandemic. This included the EUR2.85 billion raised for IK’s ninth Mid Cap fund, the IK IX Fund, in May 2020 and more recently the EUR303 million final close for IK’s Partnership Fund, a vehicle dedicated to making minority investments in larger, more established businesses.
Kirkland & Ellis International LLP acted as legal counsel to the Fund.