In June 2022, Connection Capital completed an investment into a fund investing in specialist European operational private equity managers via fund commitments and co-investments.
The fund focuses on special situations, buy-and-build and hands-on growth strategies and is managed by private equity investor, Opera.
The Fund Manager
The Managing Partner and founder of Opera Investment Partners, James Roebuck, is well known to the Connection Capital team having dealt with him over a number of years at his former firm, Clearsight.
In 2020, the original founder of Clearsight decided to stop managing third party money and helped James and the Clearsight team to establish Opera as an independent firm, with both capital and advisory support. Clearsight legally transferred all its investment tools, process IP, CRM databases and GP relationships to Opera.
The Opera team has been in this niche market since 2008 and has established a deep and valuable network over that period. Consequently, it is in a strong position to back the best emerging managers but also continue to invest with established managers that the Opera team has supported in the past and are now leading their markets.
Why small cap?
The small-cap segment in Europe remains inefficient, despite growing demand for capital and strategic support from SMEs. This has created an environment where sizable value creation opportunities persist.
These markets are less intermediated and as such, produce more off-market deals at lower valuations compared to mainstream private equity markets.
Target companies are often undermanaged or consist of financial or strategic imperfections and this creates the opportunity for experienced small-cap operational managers to build significant value quickly.
Opera is a private equity investor backing European emerging managers in inefficient, small-cap markets, which are executing high-returning operational strategies (where investment professionals and operating executives work in close partnership to improve business performance).
The investment strategies of managers targeted and backed by Opera include special situations, buy-and-build and hands-on growth.
These private equity strategies are more complex than traditional buy-out private equity and, as such, offer stronger performance.
Commitments will be made to between nine and ten underlying funds, each of which will acquire seven to ten portfolio companies. Additionally, the Fund aims to make between five to seven commitments to single deal co-investments.
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