IK is most sought-after European mid-market LBO manager

London's Graphite Capital retained second place, while French manager Astorg Partners jumped to third place from thirteenth, compared with a year earlier.

IK Investment Partners has kept its position as the most in-demand European mid-market leveraged buyout manager on the secondaries market, according to advisory firm Setter Capital.

London’s Graphite Capital retained second place, while French manager Astorg Partners jumped to third place from thirteenth a year earlier, according to Setter’s 30 Most Sought-After European Mid-Market LBO Managers on the Secondary Market Q3 2015 report, which ranked managers with most recent funds are between $500 million and $2 billion.

IK focuses on mid-market investments in the Nordics, the German-speaking region, France and the Benelux region. The firm has raised over €7 billion across seven funds since 1989 and is currently in market with a small-cap fund targeting €250 million. Graphite invests in mid-market UK companies in deals up to £200 million ($310 million; €277 million) and in 2013 used the secondaries market to buy stakes in one of its own funds, Graphite Capital V, according to PEI’s Research and Analytics division.

Astorg invests at least €15 million in European-headquartered companies that have international exposure. The firm holds stakes in portfolio companies across a range of sectors including IT, healthcare, manufacturing and retail, and this year is set to launch its latest fund, Astorg VI, targeting €1.5 billion, according to PEI data.

Funds of the most in-demand managers priced on average 12.5 percent higher than funds outside the top 30, with buyers paying on average 98.7 percent of net asset value (NAV) for stakes of managers who made the list. These funds had an average internal rate of return (IRR) of 16.9 percent.

The average size of the top 30 funds was $691 million, according to the report. The age of the firm also made a difference – firms in the top 30 had raised five funds on average, compared with two for those who didn’t make the list.

Deutsche Beteiligungs, LivingBridge and STAR Capital Partners were among managers who joined the rankings this year, while Apax France, Gresham Private Equity and Summit Partners Europe fell out.

Here are the 10 most sought-after European mid-market buyout fund families:

  • Industri Kapital (IK Investment Partners)
  • Graphite Capital
  • Astorg Partners
  • Segulah Management
  • Investindustrial
  • Chequers Capital
  • Waterland Private Equity
  • Mid Europa Partners
  • DBAG Europe (Deutsche Beteiligungs)
  • Exponent Private Equity

In August, Setter Capital released its most sought-after European large LBO manager ranking for funds larger than $2 billion, with CVC Capital Partners, Apax Partners and EQT taking the top three spots.

Toronto-based Setter Capital bases its research on the Setter Liquidity Ratings, which rates fund families as excellent, very good, good and unrated, depending on demand and saleability of the fund families on the secondaries market. Setter’s ratings are largely determined by the collective shortlists of the more than 1,300 buyers the advisory firm covers.