Arcadia Sustainable Capital III Fund Closes Funding of €80 Million

Arcadia sgr has announced the first closing of funding at €80 million for its latest fund, the Arcadia Sustainable Capital III Fund, and the start of operations with its first investment, namely the acquisition of 75 percent of KEP Italia, a manufacturer of protective helmets for equitation with a reference brand, an exclusive partner for one of the most prestigious French luxury maisons, for which it develops a dedicated product.

The stake was sold by founders Lelia Polini and Bianca Collet-Serret, who will retain the remaining 25 percent of the company and support its ambitious development and consolidation projects.

Fundraising these days is rather complicated, as the data recently released by AIFI-PwC for the first half of 2023 also showed. However, the overall fundraising target for Arcadia’s new fund remains €120 million with a hard cap of €150 million.

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Arcadia Sustainable Capital Fund III

Almost all investors from the previous funds have also confirmed their commitment to ASC III, in many cases increasing their commitment, including the European Investment Fund, which has renewed its support for the Arcadia team for the third time, as well as Italian institutions, HNWIs, and family offices.

The management team, chaired by Guido Belli and strengthened with the entry of Luca Ravano, who joined last April as managing partner, joining Simone Arnaboldi as managing director, once again participates with a significant investment on the same terms as other investors. As a reminder, the previous fund, Arcadia Small Cap II, launched in 2017, closed at 80 million in May 2019. In contrast, the first fund, Arcadia Small Cap Fund, had closed funding in 2012 at 53 million.

Arcadia sgr’s third fund, which is PIR compliant and classified under Art. 8 of the SFDR regulations, has a similar investment strategy to the previous two but with a strong focus on ESG issues. Its targets, however, will always be SMEs with a turnover of 10-50 million euros, preferably located in northern Italy, with clear opportunities for growth and development, moderate use of leverage, and strong involvement in the sgr’s management team in supporting the companies’ materialization.

Further reinforcing the commitment and vocation to sustainability in the management of ASC III, a 20 percent share of carried interest will be contingent on the full achievement of ESG objectives, set independently on each investment.

In fact, the first acquisition involved, as mentioned, 75% of KEP Italia, founded in 2007 and based in Cavalgese della Riviera (Brescia), which is known not only for its focus on safety and design, but also for its attention to sustainability, particularly through the use of recycled raw materials.

Arcadia also boasts important partnerships with some of the most successful equestrians and riders, as well as being a historic sponsor of numerous international competitions and the Italian Equestrian Sports Federation. The nearly endless opportunities for customization of KEP helmets then help reinforce the brand’s DNA of exclusivity. The company ended 2022 with 8.4 million euros in revenues, EBITDA of €1.9 million, and net cash of €2 million.

Lelia Polini and Bianca Collet-Serret said, “In choosing a new partner who could continue, by our side, the path of growth achieved in recent years by the Company, we appreciated the professional approach and willingness to listen of the Arcadia team as well as the skills that make it an ideal strategic partner, capable of supporting KEP in its project of development and growth also by external lines.”

For Arcadia, partner Stefano Piras and managing partner Luca Ravano led the transaction, who said, “In just a few years, thanks to the clear vision of Lelia Polini and Bianca Collet-Serret, KEP has succeeded in establishing itself in a very selective market in an extremely convincing way, with an ability to attract and engage customers based on the one hand on legitimacy in the field of protection and security and on the other on the distinctiveness of the products in terms of comfort and aesthetics. Strong positioning and distribution quality make KEP the ideal platform for a project that seizes opportunities for organic growth and can act as an attraction for additional brands in the target sector. We are excited to have the opportunity to contribute to Lelia and Bianca for the future development of the company.”

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(Featured image by Nick Fewings via Unsplash)

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First published in Be Beez. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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