Schroders Capital raises $2.6bn in private equity direct and co-investments

Schroders Capital has achieved a significant fundraising milestone, successfully raising over $2.6 billion for direct and co-investments in private equity since January 2022, most recently driven by the successful €400 million close of one of its leading European buyout funds, Schroders Capital Private Equity Europe Direct III. ​ ​

This feat reinforces Schroders Capital's position as a key participant in small to mid-sized buyouts which have, crucially, delivered robust returns on behalf of its clients.

The Europe Direct III fund has garnered strong support from a diverse group of global investors, including both existing clients and new investors, spanning pension funds, insurance companies, endowments, foundations, and family offices.

The fund has seen strong fundraising momentum with clients increasingly looking to benefit from the high growth potential of European SMEs. The firm's investment approach, successfully implemented for two decades, is focused on delivering business transformations with low financial leverage.

Successful exits from PSS (Belgium), Olink (Sweden), Intellera (Italy)

Schroders Capital’s private equity team has been focused on sourcing investments for transformational improvement and growth. Whilst the larger end of the market has been struggling to deploy dry powder and realise larger investments, the small to mid-market buyout area has remained active.

For example, Schroders Capital successfully sold the Belgian company Premium Sound Solutions (PSS), Swedish Olink and the Italian company Intellera over the past nine months and generated more than 8x in aggregate on invested capital¹.

A key success story for Schroders Capital is Olink, a significant player in the life sciences sector based in Sweden. Over the course of Schroders Capital’s ownership, the company made extensive investments in R&D and launched new proprietary technologies, expanding the company’s potential market. The investment into Olink was alongside Summa Equity, a leading purpose-driven thematic investment firm. The subsequent exit, which took place in July, represented the largest liquidity event for Schroders Capital from a private equity investment, culminating in proceeds of more than $325m at exit.

Another success story for Schroders Capital is the Belgian company Premium Sound Systems (PSS), which is based in Dendermonde. PSS, a key player in the audio solutions industry, has specialised in developing and manufacturing sound systems primarily for the global automotive sector. This included working alongside leading Original Equipment Manufacturers (OEMs) such as BMW, GM, VW/Audi, and Jaguar/Land Rover. The company consistently delivered robust revenues backed by a significant order backlog. Schroders Capital invested in the company in Q1 2019, which opened a new chapter of growth for PSS. By 2022, the company reached a pivotal point, having produced over 110 million speakers, which were fitted in two hundred different car models. Further showcasing their commitment to delivering superior returns for clients, Schroders Capital exited the investment in the first half of 2024, as part of a transaction valued at nearly $525 million.

Operating with diversified teams across strategic locations, Schroders Capital benefits from a global reach. Leveraging its diverse investment opportunities, the company offers an attractive portfolio extending across different geographical regions².

Richard Damming, Head of European Private Equity Investments at Schroders Capital, said:
​"We are extremely grateful for the continued trust and support from our global investor base. The successful closing of Europe Direct III is a testament to our team's dedication and track record of creating value for our investors.”
​“We're pleased with the growth we've seen in direct and co-investments. Our strong track record, industry expertise, and global reach position us to continue offering attractive investment opportunities to our clients."

¹ Past performance is not a guide to future performance and may not be repeated.

² Diversification cannot ensure profits or protect against the loss of principal.

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Past performance is not a guide to future performance and may not be repeated. Investments involve risks. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested. ​ Exchange rate changes may cause the value of any overseas investments to rise or fall.

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Risk considerations:

Capital loss risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.

Market risk: ​ Market risk is the risk of investment losses due to negative effects of the capital markets on the overall performance of the fund.

Credit risk: ​ The fund will have an investor commitment/draw-down funding model which exposes the investment vehicle to the credit risk of its investors. If an investor fails to comply with a drawdown notice, the investment vehicle may be unable to pay its obligations when due.

Liquidity risk: Given the illiquid nature of private equity investments, investing in private equity are subject to asset liquidity risk. This liquidity risk is a result of the likelihood that a loss from current net asset value would be realized if an asset in the fund needed to be sold quickly in the secondary market to meet the obligations of the fund.

Currency risk: Investments in companies or instruments which are denominated in currencies other than the fund’s respective currency expose the fund to the risk of losses in case foreign currencies depreciate.

Counterparty risk: ​ The target investments may utilize derivative instruments for currency hedging purposes, which expose the fund to the risk of a counterparty defaulting.

Operational risk: ​ Operational risks are risks of loss resulting from inadequate or failed internal processes, people and systems, or from external events conducted by Schroders Capital and the managers the fund will invest alongside.