Bridges Community Ventures, a socially responsible venture firm started by Apax founder Sir Ronald Cohen, has made two times its money selling its stake in HS Atec, a UK distributor of new spare parts for lorries and trailers.
The sale back to management is the third exit for Bridges, which manages funds that aim for social improvement as well as attractive financial returns by investing in businesses in the most deprived areas of the UK.
Bridges originally invested £1 million ($1.95 million; €1.48 million) in March 2003 in a combination of equity and loan stock to support a management buyout of HS Atec.
The truck parts disributor, based in Sheffield, South Yorkshire with seven regional branches, is located in one of the most under-invested areas of the UK. The investment in the loss-making business saved over 30 jobs in the area.
The return to investors in Bridges’ funds, taking account of interest and dividends, has generated an internal rate of return of 28.7 percent.
Sales rose from £7.1 million in 2003 to £8.4 million in 2006 and the business went from loss to profit, during Bridges’ investment.
Investors in Bridges funds include leading members of the finance sector such as HSBC, Barclays Business Banking, Citigroup, 3i, Doughty Hanson, Lloyds TSB Scotland and RBS.
Other investors include pension funds, charities and endowment funds such as that of All Souls College, as well as wealthy individuals and families.