First closing for Sovereign Capital III

Sovereign Capital Limited Partnership III has just announced a first closing at £55m. The fund, which was launched in October, will have rolling closes until October, when it hopes to close at between £100-£125m.

The company generally targets investments in the lower end of the UK unquoted market, which is in the £2-10m region. Although it considers all transaction types across all sectors, it has specific expertise in areas including healthcare, leisure, waste/environmental, outsourcing, facilities management and services to IT, telecoms and e-commerce, among others. A typical transaction type would be an MBO, MBI, buy & build, roll-out or development capital.

As value investors in growth situations, and not into the development of technology or into e-commerce per se, the timing of the fund is apt. Peter Brooks, deputy chief executive, says there has been a lot of interest in the fund. “It is at the right place at the right time. Because we are into the sound economy many more people are interested in our skills,” he explains.

Sovereign Capital, formerly known as Nash, Sells & Partners had returns of 34 per cent per annum IRR on investments over 11 years in its first fund, turning investments of £35m into £150m.

Coinciding with the first closing of the fund is the appointment of Ryan Robson, who has joined the company as a director. Robson, who has substantial experience in the UK mid market, was previously a director at Gresham Trust, where he made equity investments ranging from £1.5-£12m. He also worked at HSBC Private Equity working on European private equity investments and Samuel Montagu in specialised financing.