Lloyds TSB private equity arm invests in UK property consultancy firm

Mid market firm LDC is buying a minority stake in GVA Grimley despite fears of a slowdown in UK commercial property.

Lloyds TSB’s mid market private equity firm LDC has invested £40 million (€55 million; $82 million) in a London-based commercial property services firm.

GVA Grimley, which employs 71 equity partners, provides consultancy services across the country, deriving half of £148 million annual revenues outside the capital.

The cash injection by LDC will help fund corporate acquisitions and could pave the way for an eventual flotation of the company.

It comes at a time of uncertainty in the UK real estate market, with investment volumes falling. However, Tim Farazmand, managing director of LDC in London, said: “The opportunity to invest in a business of this quality does not come along very often. We are confident that GVA Grimley’s strong regional offices, growing London presence, broad client base and high proportion of stable consultancy revenue offer an excellent platform for growth,” he said.

As a result of the deal, GVA will transform from a limited liability partnership into a limited company from November 28, a move opening up ownership of the majority equity to a number of employees, not just its equity investors.

According to GVA, revenues in the first six months of the year rose 12 per cent.

Chief executive Bob Barnett said: “As an LLP it is difficult for us to acquire large businesses without changing our capital and funding structure. LDC will help facilitate our continued growth and their investment is a testament to the diversity and stability of our business”.