Penta Capital Partners was formed when five managers at Royal Bank Development Capital resigned last summer. As if to irk their former employers, Penta raised half the £100m (E172m) from the Bank of Scotland, RBS's arch-rival. The remaining half comes from Old Mutual, the financial services group.
Penta believes it can fill a niche which has opened up in the UK and Ireland for backing mid-market businesses, as other private equity firms chase either start-ups or larger pan-European buy-outs.
It plans to invest £1m-20m in each business it backs, mainly in the IT and communications, business services and leisure sectors.
Penta hopes to bring in at least four more investors before closing the fund, by targeting a handful of financial institutions interested in increasing their exposure to private equity, but who do not already have their own captive private equity management company.