LDC ups investment pace

The captive private equity firm of Lloyds Banking Group remains one of the UK mid-market’s most active investors.

LDC, the private equity division of Lloyds Banking Group, is on target to invest around £300 million (€355 million; $458 million) into the UK mid-market throughout 2010, according to London-based director Daniel Sasaki. Over the last two years the captive private equity unit has invested around £200 million per year.

The private equity unit has attracted scrutiny from competitors and industry observers alike over the course of the financial crisis; while its parent company was part nationalised, the private equity team has been able to invest the bank’s balance sheet money aggressively in the UK mid-market.

Lloyds TSB: Parent to the UK's most active mid-market investor

In the 12 months ending in March 2010, LDC had deployed significantly more capital in more deals than any other firm in the UK mid-market. According to the firm’s data, it was involved in 17 deals in the £5 million to £250 million range, with the nearest competitors being Maven Capital Partners and Sovereign Capital with six deals each.

In the same period LDC invested £640 million. The next most active investor in terms of volume of capital put to work was HgCapital with £297 million, according to the LDC data.

LDC has been the most active firm in the UK market as a whole in 2010 by number of deals, executing five in the first half of the year, according to data provider Mergermarket.

Sasaki’s comments to PEO came on the heels of LDC’s £100 million acquisition of Easynet Global Services, a data networking business formerly owned by communications conglomerate BSkyB. LDC wrote a £68 million equity check for the deal, with the balance of the transaction being financed by a combination of senior and junior debt provided by HSBC and the European arm of alternatives firm Ares Capital.

Led by chief executive officer Darryl Eales, LDCrecently swept the boards at the British Private Equity & Venture Capital Association’s (BVCA) 2010 portfolio company management awards, winning seven regional awards.