Gresham’s Fund III closes on £235m

The UK mid-market buyout firm has held a final closing of its third fund, exceeding its £200m target and securing commitments from new international investors.

Gresham, the UK mid-market private equity house, has announced a final closing of its Gresham III fund on £235 million (€348 million; $414 million).

The fund, which was launched in May 2003, is Gresham’s first fundraising since gaining independence from Zurich Financial Services and includes a £75 million cornerstone investment from Zurich.

Just short of 20 institutions invested in Gresham III including pension funds, banks, insurance companies and fund of funds from the UK, Europe, Asia and the US. Commitments came from Access Capital, Alpinvest, ATP Private Equity Partners, Bank of Scotland, Eagle Star Life, Henderson Global Investors, Swiss Re and Wilshire among others.

The firm held an initial closing of the fund in December 2003 on £153 million and has made two investments from the fund to date. It led the £18 million management buyout of the restaurant chain, Individual Restaurant Company in March and sponsored the £7 million MBI/MBO of IT support services firm, 2escape2 in July 2003.

The fund will concentrate on UK lower mid-market buyout transactions across a range of generalist sectors. In a statement, Paul Marson-Smith, chief executive of Gresham said: “I am delighted that we are over-subscribed in just one year. This demonstrates the strength of Gresham’s track record and the significant value creation opportunities in the UK lower mid-market.”

The firm, with offices in London, Birmingham and Manchester anticipates investing approximately half of the new fund in the South of England, with the remainder split between the Midlands and the North of England.

International Private Equity Limited, the firm run by Douglas Miller, acted as placement agents for the fundraising. London law firm Macfarlanes provided legal advice.