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Exclusive: Primary Capital heads for rapid final close

The firm, which owns stationery retailer Paperchase, is expected to close its fourth buyout fund on £225m in February.

Primary Capital, a UK-based lower mid-market firm, is nearing its target for its fourth buyout fund, according to a source familiar with the matter.

Primary, which only sent out its private placement memorandum in November, is aiming to collect £225 million, the source said. It is understood the firm will hold an interim close in January followed by a final close in February.  

Primary did not respond to a request for comment at press time. 

The fund is of a similar size to the firm’s prior fund, Primary Capital III, a £200 million vehicle raised in 2006.   

The fund will have the same strategy as Primary’s prior funds. The firm targets companies in the UK with enterprise values of between £20 million and £100 million, writing equity cheques of between £10 million and £40 million, according to the firm’s website. 

Primary invests in a number of sectors including consumer, leisure, business support services, IT media and communications and industrial products and services. One of Primary’s best known investments was Yo Sushi, a restaurant chain it sold in 2008 for a 6.2x return. Among its current investments are UK stationery retailer Paperchase and tourist business Leisure Pass Group. 

In April, Primary Capital sold its stake in Amber Travel, a rail travel group, to ECI Partners, generating a return of over 3x. It also sold UK manufacturing business Napier Turbochargers to Wabtec in late January, netting a 5.5x return. 

Primary joins a list of UK firms that have raised this year or will be raising soon. In November, August Equity was nearing its £200 million hard-cap for its third fund. In September, Graphite Capital held a £475 million final close for its eighth buyout fund. Synova Capital closed its oversubscribed Synova Capital Fund II on £110 million a month prior to that. In July, Dunedin reached its £300 million hard-cap for its Fund III, exceeding its £250 million target. Additionally, ECI Partners will also return to the market next year, hoping to raise £400 million for its tenth fund.