In a strategic move set to reshape the landscape of search fund investments, Spanish asset manager Swanlaab Venture Factory and Dutch investment firm Scipio Holding Group have teamed up to launch a €25 million fund, Scipio Swanlaab SF SCR. This fund is uniquely positioned to invest in search funds worldwide, tapping into the lucrative market of family-run SMEs seeking succession solutions.
A Boon for Family-Run SMEs and Investors Alike
Family-run SMEs, generating millions in profit annually, often face a succession dilemma when owners look to retire without a clear successor. The Scipio Swanlaab fund aims to bridge this gap by investing in search funds—a model where individuals or teams (searchers) are financed to find and manage businesses primed for growth. This investment strategy, according to a Stanford Graduate School of Business study, has yielded annual returns above 30% over the last 25 years, making it an exceptionally high-performing asset class.
Scipio’s Proven Track Record in Search Fund Investments
Scipio brings to the table over three years of hands-on experience in this innovative asset class. Having funded almost 30 searchers and completed 10 acquisitions across four continents, Scipio’s expertise lies in identifying and supporting top-tier searchers. These searchers, equipped with extensive experience and negotiation skills, are adept at uncovering and acquiring businesses with significant potential for value creation under professional management.
Strategic Partnership for Enhanced Opportunities
The decision to collaborate with Swanlaab marks a pivotal moment for Scipio, aiming to elevate its investment strategy to a new height. Aitor Sancho, Managing Partner at Scipio Holding, highlights the importance of this partnership: “Moving to a regulated investment vehicle was essential for us to capitalize on the multitude of investment opportunities. Swanlaab’s expertise in tech investing and shared values made them an ideal partner for us.”
Mark Kavelaars of Swanlaab echoes this sentiment, emphasizing the complementary nature of search funds to Swanlaab’s investment focus in B2B Software and AgroTech. “This fund presents our investors with an opportunity to invest in established, cash-flow-positive businesses at exceptional valuations, offering attractive and unique returns,” says Kavelaars.
Global Reach and Tech Focus
The Scipio Swanlaab fund, with its global mandate, plans to invest across Europe, Asia, the Americas, and Oceania. Both firms also intend to leverage their tech expertise to invest in consolidated businesses with significant technological components or potential.
A Promising Start and Ambitious Goals
With a target size of €25 million, the fund is set to commence operations in the first half of 2024. Over a five-year period, it plans to invest in 30 searchers and complete 20 acquisitions. Given Scipio’s existing portfolio of over 20 funded search funds actively seeking acquisitions, the fund is poised to hit the ground running, deploying capital into cash-generating businesses almost immediately.
Conclusion: A Forward-Thinking Investment Strategy
The Scipio Swanlaab SF SCR fund represents a forward-thinking approach to investment, combining the strengths of both Swanlaab and Scipio. By focusing on the untapped potential of search funds and family-run SMEs, this partnership is set to create significant value for investors and businesses alike, marking a new chapter in global venture capital and investment strategy.
