FS Search Fund
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FS Search Fund
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A search fund is an investment vehicle through which an entrepreneur raises capital to find, acquire, and lead an existing company rather than found a new one. Investors underwrite the searcher's time and expenses during the search; once a target is identified, they fund the acquisition. The searcher becomes chief executive and compounds value over several years before an eventual sale.
Search capital is committed by a small investor group; 12–24 months are spent sourcing and screening targets.
Diligence, valuation, and structuring conclude in the purchase of a single, cash-generative company.
The searcher takes the CEO seat, retains the team, and holds the business steady through the transfer.
Three to seven years of operating investment precede a sale or a long-term hold.
One or two searchers raise search capital from 10–15 private investors and family offices, funding salary and costs for a 24-month search. The same investors provide the acquisition equity.
The searcher carries the search personally – own capital, bank debt such as KfW succession financing, or a flexible equity partner – and brings investors in only once a deal is signature-ready.
Structured formats in which searchers are guided through sourcing, financing, and closing inside an existing platform – Novastone Capital Advisors among the established European examples.
Average capital multiple to investors across all funded search funds – including those that never acquire.
Return on invested equity where the searcher sells the company after the growth phase.
Of searchers find and successfully buy a company.
Of acquired businesses suffer a total loss – a proven, profitable model runs from day one.
German companies face a generational handover by the end of 2026/27. More than 230,000 are searching urgently for an external successor because no one inside the family will take over.
Private equity funds above €150m cannot justify deals at €1–3m EBITDA. Fixed transaction costs of €300,000 and upwards consume a disproportionate share of the return, and equity tickets below €10m do not move a large fund's volume.
Many proprietors deliberately refuse to sell a life's work to a financial investor who may break it up or resell it after three years. A searcher negotiates as a future entrepreneur on equal terms, moves to the site, takes over personally as managing partner, and commits to continuing the business with respect for its staff and culture.
Dedicated search fund investors provide German searchers with both search and acquisition capital.
Defensive, high-margin B2B niches with recurring revenue and a transferable customer base.
Klingel Medical Metal – acquired and scaled by a former searcher, and the clearest German proof that the model transfers.
ETA offers an earlier route to general management than either a start-up or a corporate career – and the acquired company is already established, profitable, and staffed. The downside risk sits far below that of founding from zero, while the equity upside remains entrepreneurial.
The DACH region has a deep succession pipeline and comparatively few searchers competing for it. Early movers negotiate proprietary deals rather than auctions – which is precisely why we build the network now, ahead of the market.
Members work through live DACH succession cases alongside acting searchers, investors, and operators.