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Ex-Warburg Pincus execs raise €392M for tech platform fund

Newly launched Corten Capital has raised €392 million for its first fund dedicated to bolt-on deals.

A new firm set up by two former Warburg Pincus executives has reached a €392 million close on its first fund targeting tech platform companies. London-based Corten Capital’s debut vehicle underscores a growing appetite among PE investors for buy-and-build strategies.

Corten Capital I, which originally targeted €300 million, will back just two to three B2B technology companies in Europe and North America. The fund will invest €250 million in each platform company⁠ over time—with an initial investment of €50 million and €150 million⁠—to spend on product development, overseas expansion and acquisitions.

Buy-and-build strategies are increasingly popular among PE firms as a means of boosting returns by cutting costs and realizing economies of scale. European bolt-on deals represented 63.4% of private equity buyout deal volume in Q1 2020, according to PitchBook’s European PE breakdown. The report notes that bolt-on transactions will likely grow their share of overall buyout activity as it becomes easier to secure debt for smaller deals following the pandemic crisis.

Corten Capital was launched last year by Joseph Schull and Simon Begg, formerly head of Europe and European COO at Warburg Pincus, respectively. They were joined by former Inmarsat CEO Andrew Sukawaty and Don Robert, who was chairman and CEO of Experian.

“Our fund close is very timely in view of the current economic backdrop, which creates uncertainty but also accelerates the imperative to digitalize and automate business operations across industries globally,” said Begg in a statement. “With long term capital and no legacy portfolio, we are very optimistic about the opportunity to back and build companies with transformational growth potential in our sector.”

Featured image via Alexander Spatari/Getty Images

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    Written by Leah Hodgson
    Leah Hodgson is a London-based senior reporter for PitchBook covering venture capital across Europe and the Middle East. Leah graduated from the University of Surrey with a BA in international politics with French. She has previously been a radio reporter in France. She later turned to financial journalism, covering the wealth management industry. She joined PitchBook in 2018.
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