Morphosis Capital Launches New Investment Fund
Morphosis Capital Partners BV, a prominent growth capital fund, proudly announces the launch of Morphosis Capital Fund II. This new fund comes with a robust commitment of over 100 million euros, representing a significant increase compared to its predecessor, which had an approximate commitment of 50 million euros. The mission behind this fund is to catalyze the growth of small and medium-sized enterprises (SMEs) within various sectors such as healthcare, B2B services, consumer products, retail, and niche manufacturing.
Aiming to Advance SMEs
The goal of the Morphosis Capital Fund II is to provide financial backup to entrepreneurial companies across Romania and the region, effectively doubling the resources available for investment. This fund strives to achieve extensive growth by not only supporting organic business development but also through mergers and acquisitions. This approach is pivotal for the continued evolution of the entrepreneurial ecosystem throughout Central and Eastern Europe. As the first fund matured, it achieved an impressive IRR of over 30% by securing one full exit and two partial exits, creating a strong foundation for this next phase.
Investment Strategy and Target Sectors
The new fund plans to make 9 to 10 investments, each averaging between 10 to 15 million euros. In contrast, the original fund succeeded with six investments ranging from 5 to 10 million euros. Morphosis Capital Fund II will dedicate its efforts mainly towards companies in Romania, but it will also set its sights on neighboring countries, expanding into Bulgaria, Croatia, Czechia, Poland, Slovakia, and Slovenia. The fund is geared towards targeting companies with EBITDA between 1 to 5 million euros, often pursuing majority stake acquisitions. Notably, this expansion marks the first regional approach taken by Morphosis Capital, which until now has focused solely on Romanian investments.
Growing the Team for Expanded Reach
To effectively implement its new strategy, Morphosis Capital has bolstered its team size from 8 to 12 members. This expansion in human resources reflects the fund's ambition and aims to ensure the smooth execution of its investment strategy. The nearly doubled fund size is a testament to the strong performance and investor confidence generated by Fund I. This strategic growth enables the firm to further solidify its standing in the competitive landscape of investment management.
Focus on High-Potential Investments
When selecting portfolio companies, Morphosis Capital prioritizes businesses within fragmented industries that possess the potential for growth, whether through organic expansion or through buy-and-build strategies. Importantly, the firm seeks to partner with companies demonstrating strong financial metrics, a solid organizational culture, and promising prospects for future mergers and acquisitions, thereby increasing exit possibilities for investors.
Successful Initial Investments
Morphosis Capital Fund II has already executed two significant investments. The first investment is in Mark Twain International School (MTIS), recognized as the first private educational institution in Romania featuring a dual curriculum. The second commitment was finalized with Supermarket La Cocos, a well-known local retailer.
Support from Leading Institutions
Morphosis Capital Partners BV is significantly supported through the National Recovery and Resilience Plan as well as from the InvestEU Fund, courtesy of the European Union. An initiative managed by the European Investment Fund continues to play a crucial role in fostering the growth of SMEs across the area. The European Investment Fund previously functioned as the anchor investor for Morphosis Capital's inaugural fund, allowing for continued confidence in nurturing regional entrepreneurship.
In addition to EIF’s partnership, Morphosis Capital has welcomed capital from the European Bank for Reconstruction and Development along with commitments from the International Finance Corporation. These collaborations place Morphosis Capital at the forefront of private equity invested in Romania, with backing from three major international financial institutions. The firm has also successfully garnered interest from local and international family offices, including Belgium's Vybros Capital Partners and Inspire Asset Management, diversifying its investor network and appeal.
Conclusion on Fund’s Impact
This operation is strategically funded by the European Union’s NextGenerationEU initiative, supported by the Romanian Government under the Romania Recovery Equity Fund. With this financial backing, along with the EU's InvestEU Fund, Morphosis Capital is poised to make significant strides towards empowering businesses and invigorating the local economy.
Frequently Asked Questions
What is Morphosis Capital Fund II's main focus?
The fund primarily focuses on fostering the growth of SMEs across Romania and its neighboring regions, with investments in key sectors.
How much capital has been raised for Fund II?
Morphosis Capital Fund II has garnered over 100 million euros in committed capital, doubling the previous fund's investment capacity.
What types of companies will the fund target?
The fund will concentrate on companies with EBITDA ranging from 1 to 5 million euros, primarily seeking major stake acquisitions.
Who are the key investors in Morphosis Capital?
The fund has attracted investment from major institutions, including the European Investment Fund and the International Finance Corporation.
What is the expected number of investments from Fund II?
Fund II aims to execute between 9 to 10 strategic investments to help enhance the growth of targeted companies.
