Eurazeo, the €8bn (£7.1bn) European private equity house, has acquired its rival Idinvest in a deal which values the firm at €310m.
Eurazeo, which owns consumer brands such as Moncler and Desigual, bought 51 per cent of Idinvest from France-listed investment firm Idi for €230m. It will now own around 70 per cent of the company, with Idinvest's management team retaining the other 30 per cent.
However, Eurazeo intends to gradually acquire the management's shares over the coming years until it owns the whole of the company. The merger of the two European stalwart private equity houses will create a firm with €15bn under management.
"We’re extremely proud of this merger, which will enable us to support companies across the spectrum from venture capital to large cap," said Virginie Morgon, deputy chief executive of Eurazeo.
Idinvest's venture and growth capital teams have made investments in a number of companies which have gone on to make waves in their markets, such as music streaming site Deezer and second-hand luxury fashion marketplace Vestiaire Collective.
The firm also has a private debt business, building Eurazeo's capabilities to fund companies at all stages in their lifecycle.
The merging of the two firms follows an increased period of consolidation in private equity over the last two years. Though there is a significant amount of investor money seeking a place in private equity funds at the moment, following a period of strong performance for the asset class, one fundraising adviser told City A.M. recently that it still tough for certain firms to raise money, as investors are ploughing their cash into well-known stellar names.
Firms such as Eurazeo are capitalising on this trend, broadening their array of funds to scoop a larger share of investors' cash.