Lyceum Capital, a UK mid market manager, has begun informal talks with investors to raise its second fund, according to one backer of its 2000 fund.
The fundraising has been delayed by the firm’s drawn-out efforts to extricate itself fully from its German parent bank, WestLB, a process it finally completed last year when AlpInvest and Axa Private Equity bought the bank out and Lyceum re-branded.
Since then Lyceum has grown its team taking on David Harland as chief operations officer and two associate partners in Mark Hall and Rob Gershon. The firm is headed by two veteran managers: Philip Buscombe and Jeremy Hand.
The investor said the 2000 fund made nine investments and has returned its capital with just three exits and a number of recapitalisations. The fund is generating an internal rate of return in excess of 30 percent gross.
The firm has yet to settle on a target for the fundraising, but according to the investor, it is likely to be of a similar magnitude to the 2000 predecessor.
To ensure it has sufficient firepower, Lyceum is likely to offer a co-investment programme to its limited partners allowing the firm to pursue its growth strategy for its portfolio businesses.
The nine platform businesses that the fund has acquired or created since 2000 have made a further 30 add-on acquisitions to date.
Its investments are in a number of sectors, including healthcare, education, business outsourcing, industrial systems & services, IT and environmental risk management consultancy.
West Private Equity was formed in 1999 with a cornerstone commitment to its debut fund from WestLB.
Lyceum declined to comment.