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Gimv splashes cash on CapMan tie-up

The Belgian firm has bought three ‘early secondary’ interests in CapMan funds, made one primary commitment and is eying a 10% stake in the management company.

Benelux private equity stalwart Gimv has formed a significant partnership with listed Nordic alternatives firm CapMan. The Antwerp, Belgium-headquartered firm has acquired €17 million-worth of commitments to three CapMan funds and made an additional commitment of €13 million to CapMan’s next Nordic buyout fund, CapMan Buyout IX.

As well as gaining exposure to CapMan’s funds, Gimv has acquired a 4.38 percent stake in CapMan itself. The Belgian firm has been building the stake through acquiring publicly traded CapMan shares for a number of months, a spokesman for Gimv said in an interview. At the current price, Gimv’s stake is valued at around €4.4 million.

Gimv intends to increase its stake to 10 percent, assuming the shares remain attractively priced and sufficiently liquid, the spokesman said. It is also in the process of taking a seat on CapMan’s board – a course which has the support of CapMan management.

The multi-faceted deal comes as CapMan shifts all its fund interests off its balance sheet into a separate, non-listed feeder vehicle called CapMan Fund Investments. The separation should allow the firm to separate the mark-to-market value of its fund interests from its ongoing fee income and carry.

By injecting €17 million into the feeder vehicle, Gimv has effectively bought three “early secondary” stakes. Between the three fund interests in CapMan Technology 2007, CapMan Russia and CapMan Public Market, there is €13.6 million in uncalled commitments and investments worth €3.4 million at June 2009 valuations.

The secondaries sale reduces CapMan’s uncalled commitment levels from €61.9 million to €48.3 million.

The two firms had an existing relationship before the deal: Gimv is a limited partner in CapMan’s 2006 buyout fund, with a commitment of €20 million.

As industry practitioners predict increased consolidation among private equity firms, the tie-up could well be a precursor to greater cooperation between the two firms, such as joint venture funds or a full merger. A spokesman for Gimv declined to comment on any future plans.

In the last month, CapMan shares have increased 36 percent and were trading at €1.35 per share at press time. The firm manages third-party private equity funds with approximately €3.5 billion in total capital.