L’Echo, 24 Octobre 2024. Michel Lauwers.
The team managing Profinpar and their 50 entrepreneur-investors are launching a new fund under the same name, designed to step in where traditional private equity funds stop.
Françoise Belfroid (formerly of the Ronveaux group), Francis Blake (Imperbel), François Blondel (KitoZyme, OncoDNA), Christophe Leclercq (Newelec), Paul Portier (Groupe Portier), Etienne Rigo (Octa+), and Thierry Quertinmont (formerly of Trafic) are among the entrepreneur-investors participating in Profinpar’s capital.
This Walloon investment fund, created in 2016 from an investors’ club, aims to take stakes in promising SMEs whose fundamentals are too weak to attract traditional private equity funds, yet too strong to interest individual investors.
These founders are now launching a second version of the fund, bolstered by more entrepreneurs and greater resources.
The new Profinpar will also prioritize Walloon and Brussels-based SMEs, “because that’s where the need is greatest.”
Injecting ESG
“While there are seven to eight funds serving this SME market in Flanders, in Wallonia, Profinpar is almost alone,” notes Rodolphe Blondiau, a former partner at M&A firm Merodis who has joined Dimitri de Failly and Thomas Walgraffe on the Profinpar management team. Founder Pierre Robin, 74, is stepping back from operations but remains on board as senior advisor and investor.
“The companies we target employ between 10 and 200 people, have an EBITDA between €0.5 and €4 million, a positive cash flow, and an enterprise value between €5 and €25 million, often with a single shareholder-manager,” explains Dimitri de Failly.
Their main needs lie in governance (no board of directors), executive teams (too reliant on the founder), and challenges such as regulation, competition, or ESG criteria.
€2 to €6 million per ticket
Profinpar’s strategy involves pairing each portfolio company with one or more entrepreneur-investors based on relevant experience. “We are multisectoral, and so are our shareholders. We avoid only three sectors: hospitality, construction, and biotech.”
Backed by €50 million (up from €38 million for the first fund), of which €31 million has already been raised, the new fund will make minority or majority investments ranging from €2 to €6 million, compared to a previous maximum of €4 million. It will also require at least two board seats.
Structured as a Belgian private PRICAF, the fund aims to complete two to three transactions per year for the first five years, then either exit or continue supporting companies for the next five.
To date, the first Profinpar fund, which will be wound down by the end of 2027, has invested in ten companies and exited four: MiD Finance, Nexum, ODB, and Pro Leather. The first three generated capital gains, while the fourth filed for bankruptcy shortly after Profinpar’s exit.
“In any portfolio of ten, there are always two or three top performers and one or two setbacks,” says Dimitri de Failly. “But our first fund’s investors have already recouped their capital and made a profit.”
100 files analyzed per year
Each time the fund invests in a company, it works along two axes: improving structure and supporting growth. “That means putting in place a real board of directors, a leadership team (reducing dependence on the founder-CEO), and a system based on operational excellence,” says Dimitri de Failly.
“We also ensure that companies grow both organically (new markets, expanded sales teams) and through acquisitions. Many SMEs are hesitant about external growth, but that’s our field, and we can help.”
The new fund also includes four public institutional investors: SFPIM (already involved in the previous fund), and newcomers Wallonie Entreprendre, Noshaq, and Finance & Invest Brussels. “It’s a sign of recognition for our model, and we’re also very complementary,” says Rodolphe Blondiau. Many entrepreneurs who contact public institutions are referred to Profinpar.
“We review around 100 proposals each year, more than half of which are presented directly by owners (without intermediaries),” he adds. “That will continue. Of the 100, around 20 go through deeper analysis, 10 undergo full due diligence, and 2 or 3 end in an investment.”
Currently, the team is reviewing a few opportunities, including two companies in digitalization and one in animal health.
Summary
Profinpar, a fund backed by entrepreneur-investors, is launching a new ten-year investment cycle with €50 million to support high-potential SMEs. Like its predecessor, it will focus on Wallonia and Brussels, “where the need is greatest.” The fund will target SMEs with 10 to 200 employees, EBITDA of €0.5 to €4 million, and enterprise value between €5 and €25 million. Four public institutions are on board: SFPIM, Wallonie Entreprendre, Noshaq, and Finance & Invest Brussels.
