ISIS Equity Partners, the UK-based mid-market private equity house, looks set to reach the £175m target for its third buyout fund. The group announced yesterday that is has received commitments totalling £151m at the fund’s latest closing.
The fund, which held a first close on £125m at the end of 2002, is scheduled to hold a final close in December 2003. “The fundraising environment is not easy and we are pleased that we have achieved 85 per cent of our target, with several potential investors currently in due diligence,” said Wol Kolade, managing director of ISIS Equity Partners.
ISIS III Fund will make equity investments of between £2m and £30m in UK-based companies with enterprise values of between £5m and £50m. The fund will invest predominantly in companies operating in the business services, consumer markets, healthcare, media and information technology sectors.
According to Kolade, the firm is optimistic about the current investment environment. “We think that the investment climate for ISIS III is exciting – depressed IPO markets and an uncertain corporate environment provide an excellent backdrop for making investments in high quality mid-market companies.”
Despite the current difficult climate, ISIS has recently exited several companies from its portfolio. Most recently, the firm sold its interest in Tricom Group, the plumbing and heating business it acquired in 1998, for £16.5m. Accordding to ISIS, the firm generated an internal rate of return of over 50 per cent, equivalent to 4.3 times cost.
To date, 41 per cent of cash invested from ISIS II, which was raised in 1999, has been returned to investors. The firm said that two further exits are imminent.
UK law firm Macfarlanes is advising ISIS on the fundraising.