This fund seeks to capitalize on the growing opportunity created by the tens of thousands of family-run SMEs that generate millions of profit per year where the owner wants to retire but has nobody to take over. According to a study by the Stanford Graduate School of Business, search funds, a model of investing in an individual or team (searchers) who will spend two years looking for a business to acquire that they subsequently run-, has been the highest-performing asset class over the last 25 years with annual returns above 30%.
Scipio counts on over 3 years of experience investing in this innovative asset class. It has funded almost 30 searchers and completed 10 acquisitions on 4 continents and, as a result, is positioned to identify, evaluate, attract and support the best searchers in the world. Searchers selected by Scipio meet hundreds if not thousands of business owners and have the experience and capability to identify and negotiate the acquisition of those businesses with the highest potential for unleashing value with the right professional management and guidance.
To date, Scipio has invested its own capital in Search Funds but recently decided to partner with Swanlaab to launch this Fund.
Aitor Sancho, Managing Partner at Scipio Holding, said: “With a little more than 3 years experience under our belt, we needed to move to the next level and launch a regulated investment vehicle if we wanted to take advantage of the huge number of great investment opportunities presented to us. Swanlaab, with their track record in tech investing, share many of our values and were a natural partner for Scipio”
Mark Kavelaars, from Swanlaab, commented: “At Swanlaab, we believe that Search Funds represent a natural complement to our core investment strategies in B2B Software and AgroTech. Through this Fund, our LPs can invest in established, cash-generating businesses at extraordinary valuations. The fund will offer our investors attractive returns that are uncorrelated to other asset classes like private tech or public market investing.”
Scipio Swanlaab SF SCR, has a global mandate and will invest in Europe, Asia, the Americas and Oceania. Scipio and Swanlaab also expect to leverage their respective experience in technology to invest in consolidated businesses that have or can develop an important technological component.
The fund has a target size of €25 million and is expected to begin operating in the first half of 2024. Over five years, it will invest in 30 searchers and complete 20 acquisitions. Given that Scipio counts on over 20 funded Search Funds that are actively looking for acquisition opportunities, the fund will hit the ground running and can deploy its capital into cash-generating businesses almost immediately.