Gresham wraps up new £340m fund

The UK lower mid-market private equity firm has closed its Gresham 4 fund on £340m. The fund was oversubscribed and hard capped.

Just one month after its official launch, Gresham’s latest fund, Gresham 4, has closed on a hard cap of £340 million (€494 million; $619 million). Gresham 3, the firm’s previous fund, closed in May 2004 on £235 million. Doug Miller of placement agent IPEL advised on Gresham 4.

Investors in Gresham 4 included: Access Capital; AlpInvest Partners; ATP Private Equity Partners; Morley Fund Management; and Standard Life Investments.

Paul Marson Smith, Gresham CEO, said the firm had increased its total number of investors from 19 in the previous fund to 29 this time around. He added: “There was a very strong uptake from existing investors, which meant there was limited room for new ones, and we had to scale back commitments. The aim of Gresham 4 was to end up with a high quality and diversified investor base. We were a bit light on UK and US institutions, and we have filled those gaps.”

Gresham invests in deals worth up to £100 million in five sectors: business and support services; consumer; financial services; healthcare and pharmaceuticals; and industrial products.

Marson Smith claimed investors liked the firm’s rapid capital deployment – Gresham 3 is currently 80 percent invested after two years – and its ability to achieve exits, having delivered an average cash multiple of three times from 18 exits over the last 24 months. The firm, which was bought out of Zurich Financial Services in February 2003, claims an IRR of 34 percent on all realised investments since 1980.

Gresham, which has offices in London, Birmingham and Manchester, plans to invest half the new fund’s capital in the South of England and the other half in the Midlands and North of England.

Last week Gresham backed the buyout of Giles Insurance, the Glasgow-based commercial insurance provider, in a £45 million deal.