Crescenta PE Buyouts Top Performers: the plain vanilla fund with which to start building your portfolio

Crescenta Private Equity Buyouts Top Performers I, FCR is the first fund portfolio (fund of funds) that we activated in Crescenta, together with the Growth fund, in which you can invest from €10,000 upwards provided that this investment does not represent more than 10% of your assets.

The fund's name hides many clues about its strategy and objectives:

• Private Equity (PE): it is the most conventional investment strategy within private capital. It consists in investing in private companies, i.e. those that are not listed, such as family or industrial companies, with the aim of boosting their financial performance and growth.
• Buyouts: there are various investment strategies in PE, such as buyouts, which consists in acquiring holdings from existing investors. Investors take their majority of positions in mature companies with profits and a consolidated business model, with the aim of restructuring them and improving their business models.
• Top Performers: we have added this concept because the fund portfolio only invests in the best funds on the market.
• I: it indicates the fund's number. We number them because Crescenta's goal is to regularly launch new investment opportunities in this strategy. Private equity funds establish a target size based on the capital that it expects to attract. Once it is met, the fund closes and does not usually accept more investors, so if you were not able to invest in it, you can always wait for following editions of the funds.
• FCR: it specifies the type of vehicle it is, in this case it is a Risk Capital Fund.

We refer to it as a fund portfolio because it is a fund that invests in a small number of funds, which are known as underlying funds. The selection is exhaustive. We seek top-tier funds (the best in their category), and we do not include more than five to seven funds, with the aim of achieving a high level of diversification without compromising its profitability.

In total, the fund portfolio will invest in more than 120 companies, with exposure to cyclical (industry, services, finance, etc.) and defensive (healthcare, consumer, etc.) sectors, which provide protection in long-term investment periods by becoming exposed to different market cycles, geographies, sectors…

These underlying funds are exclusive, since they have only been recently available to professional investors and have a minimum entry ticket of millions of euros. Cinven or EQT are two of the underlying funds in which Crescenta Buyouts I invests.

El portfolio tiene una duración de 10 años (con posibilidad de extenderlo 2), incorporando un 20% de inversión en secundarios con el fin de reducir la vida del fondo para que puedas recibir distribuciones antes y así dotarlo de liquidez. 

The portfolio lasts 10 years (with the possibility of extending it another two), and it incorporates 20% of investment in secondary funds, with the aim of reducing its life cycle so you can receive distributions earlier and thus provide it with liquidity. The aim of the fund portfolio is to double the investment (2x MOIC) and obtain an annualised return of around 15-18% (IRR).

This estimate is based on the underlying funds' history of net returns, which exceed 18% IRR.

Crescenta Private Equity Buyouts Top Performers I, FCR is a fund designed for retail and professional investors with an investment commitment from €10,000 upwards.

It is a basket of funds that any type of investor wanting to invest in Private Equity must have in their portfolio. It is a plain vanilla fund that only invests in flagship funds of international top-tier management companies:

• Diversification: at both sectoral and geographical level
• Access to exclusive funds with entry tickets of millions of euros from €10,000 upwards
• Buyout top-quartile funds
• Largest universe of companies: more than 90% of companies are not listed. You will gain access to companies such as Idealist, MasMovil, Securitas Direct, Burger Kinghellip;
• Lower volatility: because it is a long-term investment outside the listed markets
• Potential for greater returns: the expected return on this type of funds consistently exceeds the returns obtained in listed markets, as per its historical average
• Enhance your portfolio: this strategy is an ideal hedge to reduce risk and diversify a traditional portfolio with investments in equities and fixed income

Ana Hernández, Crescenta's Investment Manager: “We believe that the best way to invest in private markets is by gradually building a diversified portfolio, which is why we believe that Buyouts is the perfect fund to start investing in private capital”.

Private Equity Buyout funds usually execute their business plans to promote the growth of the invested companies in three to five years. Over these years, they seek inefficiencies in order to implement operational and financial improvements. It is very common for funds to make their companies grow by acquiring other companies, enabling them to gain market share or expand their product and services offering. It is also common for funds to implement an internationalisation plan.

At Crescenta we are known for carrying out an extremely exhaustive selection process, establishing a highly select preliminary filter: we only analyse flagship funds of top-tier management companies with a Buyout strategy in Large Caps and the Upper Mid-Market to end with a selection of five to seven funds. Our methodology follows these stages:

1. Dealflow: we work on gaining access to the best international firms (KKR, CVC, Permira, Blackrock, Apollo and Ardian, among others)

2. Due diligence: we conduct a qualitative (we measure the funds' track record, ratios such as EBITDA, debt levels, return, portfolio, market, etc.); qualitative (we measure the team, the alignment of interests, the experience, the management company's value proposal, etc.) and legal (characteristics of the fund, contracts and conditions, taxation, etc.) analysis.

3. Portfolio creation: following this analysis, we select the five best funds. We build a portfolio with the best funds, seeking total diversification (geography, vintage year, sector, strategy, management, etc.).

You can access the fund's complete prospectus in your private area. Log in or register to view it.

The information included in this post has not been approved by the National Securities Market Commission (CNMV). This post has been produced for information purposes only. Neither this post nor its content constitute an offer, request or invitation to purchase, an investment agreement or commitment or any kind of decision. This post neither constitutes specific investment advice to purchase or sell an investment or to subscribe any investment contract or any other financial service, nor does it involve any advice or recommendation on tax-related matters. We recommend that any tax-related decision is consulted with lawyers and/or tax advisors.

You should not use this post as a basis for making your financial decisions. All forecasts, opinions, estimates and projections included in this post constitute a judgment reached by Crescenta or of renowned third parties, and they are provided solely for illustrative purposes. These forecasts, opinions, estimates and projections involve known and unknown risks, uncertainties and other factors that can make the actual results, performance or achievements materially different from the future results, performance or achievements expressed or implied in such forecasts, opinions, estimates and projections.

Past performance is not indicative of future returns. The value of the investments and the income derived therefrom can increase or decrease, and you may not recover the invested amount. Private Capital investments can give rise to a series of risks that investors must be able to assess.

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Crescenta