Wallonie Entreprendre Embraces Search Funds: A New Era for SME Succession
Wallonie Entreprendre is actively supporting the search fund model as an innovative approach to SME succession in Belgium, marking a significant shift in how business transfers are facilitated in Wallonia.
First Major Deal Closes
The regional investment organization has just completed its first search fund transaction alongside WAD Capital, backing Frédéric Schilling's holding company Kaeron in the acquisition of Groupe Jordan—a 110-person company specializing in HVAC services in Hainaut. Together, Wallonie Entreprendre and WAD Capital hold the majority stake in the combined entity, which aims to create a Benelux leader in the heating, ventilation, and air conditioning sector.
The Search Fund Model Explained
The search fund approach involves an entrepreneur raising capital from investors to finance the search for a profitable SME lacking succession plans. Once identified, the company is acquired with investor backing, with the entrepreneur taking operational control to develop the business before an eventual exit several years later.
While still emerging in Belgium, the model is gaining momentum with only a handful of active players including WAD Capital (Ghent), Arvest Group (Liège), and Innesto Partners (Brussels).
Why Wallonie Entreprendre is Betting on Search Funds
"This search fund model appeals to us because it represents a new way to facilitate business transfers," explains Sabine Colson, Investment Manager at Wallonie Entreprendre. "We intend to monitor this closely and encourage these types of transactions."
The organization sees particular value in how search funds align incentives: "The buyer shares risks with the seller since they can reinvest in the company," notes Éric Poncin from Wallonie Entreprendre's executive committee. "The buyer also implements a growth plan, and their future acquisition of additional shares depends on that growth. There's an interesting societal dimension to these takeovers."
Growing Pipeline
With a second search fund deal approved this week and set to be announced in November, Wallonie Entreprendre is clearly accelerating its involvement. The organization views search funds—alongside employee ownership models—as key niches for future growth in the SME succession market.
Real-World Impact: Frédéric Schilling's Journey
For Schilling, the search fund model proved transformative: "At the start, I had no idea what a search fund was. Without WAD, I would never have managed to find a company despite my long industrial career." WAD Capital funded his 12-month search period, while Wallonie Entreprendre provided expertise in company development and support. Now, he's ready to pursue additional acquisitions to build his HVAC platform.
