Inflexion Private Equity, the UK private equity firm, has held a first close on its second fund focusing on UK mid-market buyout opportunities.
The fund, Inflexion Private Equity Fund 2, has received commitments totalling E50m, with Inflexion Plc contributing E10m from its balance sheet. Investors in the fund include Martin Currie, Nordea Pension and London Merchant Securities. Furthermore, the management team is committing a “significant capital sum” to the fund.
In a statement, Inflexion said the capital had been raised despite what it described as “difficult fundraising conditions”. The firm finalised the preliminary placement memorandum in October 2001 and had intended to hold a first close in 2002. “Fundraising has taken slightly longer than we would have hoped but we are finding that LPs are positive about our part of the market,” said Simon Turner, managing partner at Inflexion.
Inflexion Private Equity targets mid-market private equity investments focused on buyout and development capital transactions of businesses with enterprise values of E15m to E75m in the UK. The fund will invest in what Inflexion describes as “the increasingly neglected” smaller UK mid-market sector, making equity investments in the range of E3m to E15m.
The fund is the follow-up to the E100m IPE Fund 1, which closed in 1999. The previous fund is 80 per cent invested, having made eleven investments and completed four cash realisations. “To date we have returned about 25 per cent cash to investors,” said Turner.
“Many of the industry’s best known groups initially made their names at the smaller end of the mid market before moving dramatically up-scale,” added Turner. “As a result there is significant potential for Inflexion to invest in this often over-looked market, which offers increasingly attractive investments at sensible valuations.”
Inflexion’s most recent investment came last October when the firm backed a newly-formed pub acquisition vehicle called Nectar Taverns. The £11m funding package Inflexion helped arrange comprised £4m of equity and £7m of debt.