Morphosis Capital Fund I Cooperatief UA, a growth equity fund, reports an Internal Rate of Return (IRR), namely an annual return, of over 30% from its first three exits. The fund, which made its first investment in 2019, completed three successful exits in 2022 and 2023, corresponding to years 4 and 5 of the fund. These include a full exit from Dr. Leahu Dental Clinics to Regina Maria and two partial exits from Medima Health and EMI, executed through strategic partnerships with international private equity funds, Integral Venture Partners, and Innova Capital.
“We have always positioned ourselves not merely as investors but as true partners, creating lasting bonds with the companies we invest in. Our foundational belief has always been that this partnership approach serves the best interests of our portfolio companies and aligns seamlessly with our aim of delivering optimal returns to our shareholders. Attaining an IRR of 30% from just half of our portfolio underscores our strategy’s effectiveness. Furthermore, our DPI of 0.35, even after just one full and two partial exits, speaks volumes about our commitment to ensuring liquidity for our investors. These results demonstrate our capability to yield returns comparable to top-tier growth funds and indicate the direction we are steering Morphosis Capital towards,” stated Andrei Gemeneanu, Managing Partner at Morphosis Capital.
Morphosis Capital deployed most of its capital of 50 million euros within just three years of its establishment. The fund invested 80% of its capital as cash-in, accelerating the growth of six Romanian entrepreneurial companies from the healthcare, wellness, technology, and industrial sectors. Consequently, this positions Morphosis Capital Fund I ahead of the deployment curve, emerging as a top-quartile growth equity fund in the European landscape.
The exits from EMI, Dr. Leahu Dental Clinics, and Medima Health have each yielded IRRs of over 30%. To date, Morphosis Capital retains significant holdings in DocProcess, Stay Fit Gym, and Cronos Med while also holding substantial minority stakes in EMI and Medima Health and remaining actively involved in the management of these entities.
Following the three exits, Morphosis Capital’s DPI (Distribution to Paid-In capital) stands at 0.35. This key metric for the private equity industry represents the return ratio of funds to investors. This is a significant achievement considering that just a fraction of the portfolio has been fully exited. Compared to the industry, this performance is aligned with top-tier growth global funds initiated in 2018, surpassing those launched alongside Morphosis Capital in 2019.
On top of high-level DPI, through the two partial exits, Morphosis Capital secured over 20 million euros of additional growth capital for Medima and EMI, which will support the further expansion of these two companies. For Medima, the growth will come from opening new clinics across Romania, and for EMI – through bolt-on acquisitions across the region.
Morphosis Capital Fund I retains provisions for one more investment in 2023. The investment could be either a follow-on round in one of the portfolio companies or a new investment in the sectors of the key interest. The final decision in this regard will be made depending on the market opportunities.
In 2022, Morphosis Capital Fund I reported a 42% combined increase in turnover of its portfolio companies compared to 2021, and a 106% growth of EBITDA versus the previous year. This positive trend continued in 2023; as of the end of the first quarter of this year, Morphosis Capital portfolio companies recorded revenue growth of 30% and an EBITDA increase of 29%. This strong performance contributed to a 60% appreciation in the overall gross portfolio value to-date.
About Morphosis Capital
Morphosis Capital Cooperatief UA is a private equity fund with EUR 50 million committed capital. Established in December 2018 by four Romanian entrepreneurs, Simona Gemeneanu, Gabriela Dumitru, Dragos Petre, and Andrei Gemeneanu, the fund aims to contribute to developing and transforming Romanian SMEs. The European Investment Fund (EIF), the leading financing platform for European SMEs, co-financed through the Regional Operational Programme, is the anchor investor in Morphosis Capital, while the founders themselves are the co-investors in the fund. Morphosis Capital invests between five to ten million euros in high-growth Romanian companies from sectors such as FMCG, niche healthcare, technology, and B2B services, which have a strong potential for international expansion and an EBITDA of a minimum of half a million euros. Morphosis Capital’s portfolio includes DocProcess, Medima Health, EMI, Cronos Med, and Stay Fit Gym. In 2023, Morphosis made its first exit by selling its minority stake in Dr Leahu Dental Clinics to Regina Maria.