UK mid-market buyout firm Lyceum Capital has closed its second fund on £255 million ($496.7 million; €341.6 million), 25 percent above its £200 million target, according to its chief executive Philip Buscombe.
The fundraising had been delayed by the firm’s drawn-out efforts to extricate itself fully from its German parent bank, WestLB, a process it finally completed two years ago when AlpInvest and Axa Private Equity bought the bank out and Lyceum re-branded.
Buscombe told PEO: “We have re-established the firm with a lot of investors, the kind we can do a lot with, who have money to invest if we want to develop a portfolio company.”
Lyceum's investment model focusses on acquiring platforms for buy and build strategies.
Buscombe said: “With Southen Cross, a healthcare business we sold to Blackstone, we teed up a lot of acquisitions, but were only able to do two of them. We could have done another two or three with supportive investors. The CEO was champing at the bit.”
According to Daniel Adler, a partner at Lyceum, on average each platform acquisition has made four follow-on investments. Often acquisition targets revealed themselves in the initial market due diligence ahead of the platform purchase, he said.
The latest fund’s 22 investors, including 16 first-time backers of Lyceum, have the facility to co-invest. They include AXA, AlpInvest and UK asset manager F&C Investments in a mix of US and European investors.
Lyceum raised its first fund in 2000 when it was called West Private Equity. The firm was formed in 1999 with a cornerstone commitment to its debut fund from WestLB.