Inflexion doubles down with £375m fund close

The UK-based mid-market has doubled the size of its prior fund in just four months.

Inflexion Private Equity has held a first and final close on its fourth buyout fund, raising £375 million (€434 million; $593 million) since it began marketing in June.

Fund IV is twice the size of its predecessor, which closed on £165 million in 2006. It also accounts for over half of all the firm’s funds under management, which now stand at roughly £700 million.

We did some very good deals [during the credit crunch]

Simon Turner

The “overwhelming majority” of existing investors re-upped into the fund, according to partner Simon Turner. Among the fund’s 30 limited partners is US pension the New York State Teachers’ Retirement System (NYSTERS) which made commitments to the fund of £30 million.

The firm did not use a placement agent.

Turner told PEO the mid-market firm “had a lot of demand from investors whom we couldn’t accommodate”. The fund was twice oversubscribed, according to an Inflexion statement. Both the firm’s co-investment fund, which closed on £75 million in 2009, and its previous 2006 buyout fund were also oversubscribed.

Turner attributed Inflexion’s performance throughout the financial crisis as one of the main reasons for the continued high demand. “2009 – which was a dreadful year for many – was a record year for us in terms of the cash we returned to investors.”

[We] had a lot of demand from investors whom we couldn't accomodate

Simon Turner

Inflexion’s exit of Viking Moorings in June 2009, for example, netted the firm a 12x multiple on its investment in the Aberdeen-based oil services business and marked one of its most successful deals.

Turner added that profits made during the credit crunch were re-invested and “that’s been a very good strategy for us and we did some very good deals during that period of time”. 

The fund has a five-year investment period and will make 10 to 15 investments in high-growth UK companies in the £10 million to £100 million enterprise value range. The firm will not start making investments until the previous fund is fully deployed; it has capital left to do “one or two” additional deals, Turner said.