Secondary Investment: Gradiente
Sourcing
NORD Holding’s extensive network and focus on finding promising small-cap managers led our team in 2016, to meet with Gradiente, an Italian private equity firm focused on small-cap succession buyouts, predominantly sourced in the greater Venice region. With the assistance of a highly structured development approach, Gradiente actively supports its portfolio companies by thoroughly transforming processes. It places a particular focus on professionalizing management, achieving international expansion and optimizing operational efficiency.
When NORD Holding first met Gradiente, the company was set up in a captive structure, limiting the options to develop the structure or to fundraise further. Moreover, one large shareholder in the structure was looking for a liquidity event. NORD Holding successfully explored a stapled Secondary opportunity.
Structuring
Meetings with the CEOs and CFOs of the most relevant portfolio companies were held as part of the due diligence to confirm assumptions and understand the portfolio’s future value drivers. The full due diligence was positive and so we structured an attractive investment by acquiring a significant commitment from the selling shareholder. This allowed Gradiente’s team to acquire a majority stake in the management company, and then fundraise Gradiente Fund II accordingly. So far, both funds have been performing successfully.
Adding value
NORD Holding supported the carve-out of the management company by the Gradiente team, and helped develop a market-standard LPA for Gradiente Fund II.
Following up
After the stapled investment in Gradiente, NORD Holding co-invested alongside Gradiente in HPF, the first Gradiente II portfolio company. NORD Holding aims to support HPF’s international expansion into Germany.
We are very grateful to NORD Holding for their continuous support and role as a partner and advisor. By acquiring a stake in Gradiente I from a selling investor, NORD Holding not only validated our strategy, but also gave us the international institutional backing and credibility that we needed to successfully close Gradiente II at its hard cap.
Founder & CEO, Gradiente
