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Essling Capital announces arrival

The Massena Partners spin-off will start by investing in real estate and private equity co-investments.

Paris-based investment manager Massena Partners has spun off its private equity holdings into a separate firm, according to a statement from the new entity.

Essling Capital, founded by Frank Noël-Vandenberghe and Michele Mezzarobba, who will act as president, takes Massena Partners’ €1 billion in private markets assets under management and will aim to double it within three years, according to the statement.

The firm will start by investing in real estate and private equity co-investments and use them as a platform to build out into strategies including funds of funds, non-listed debt and secondaries, Mezzarobba told PERE's sister publication Private Equity International. The firm aims to invest globally, including in emerging markets, and not just in European assets.

Of its €1 billion in AUM, €140 million comes from a 40 percent oversubscribed co-investment fund, which closed last year and is close to full deployment, Mezzaroba said. The firm plans to start raising a co-investment vehicle in the coming weeks, Mezzarobba said. The fund’s target is undisclosed.

For future funds raised, Essling has an investment period of 12 months and if any capital is not invested in this period it will be returned to the investor, who can choose to invest it in future funds with the firm. Essling will also offset fees on commitments, only charging if investments are made. To facilitate this, the firm will invest 3 percent to 5 percent in a single investment rather than 0.5 percent to 1 percent, as is common for its rivals in the French market.
The hurdle rate on Essling’s funds will be 7 percent.

“We are focused on splitting the capital gain with the investor,” Mezzarobba said.

The firm has an initial staff of 13 and plans to raise funds at least once a year.

Massena Partners was founded in 1989 by Noël-Vandenberghe to advise families, family offices and institutional investors. With the divestment of its alternatives business, it will focus on its advisory business and traditional listed investments.