Canter opts for annual fund model

The Fidelity spin-out is looking to garner annual commitments of around £30m to target the lower mid-market in the UK and Ireland.

Canter Equity Partners, the mid-market firm that spun out of Fidelity Equity Partners, has opted to raise funds on an annual basis and is looking to build up to an investment rate of around £30 million (€34 million; $46 million) per year, partner Paul Egan told PEO.

The firm started fundraising at the beginning of the year, marketing to family offices, high net worth individuals and certain institutions. Responses so far have been “positive”, said Egan.

The firm has gone for an annual fundraising model – rather than the more common approach of raising funds every two or three years – because it was more attractive to Canter’s target investor audience investors, said Egan. He added that the structure being adopted would constitute a similar experience to that of being the wholly-owned private equity unit of Fidelity, which was “effectively like a large family office”.

Annual fundraising models are frequently used by in-house private equity units, such as LDC at Lloyds and LGV Capital within Legal & General.

Canter was formed by three senior executives from Fidelity Equity Partners – the now obsolete buyout division of the global fund management firm – in August 2009. The senior team comprises three members of Fidelity’s former European buyout team: Sebastian McKinlay, managing partner, and Stephen Findlay and Paul Egan, both partners. Three analysts recently joined the team, which is expected to be further bolstered with another couple of appointments this year, said Egan.

The firm is continuing the strategy pursued at Fidelity by targeting lower mid-market deals in the UK and Ireland with a focus on three sectors: business services, media & information and technology.