Lyceum to lose seven partners – exclusive

Seven partners have resigned from Lyceum Capital after the firm pulled its latest fundraise and pivoted to a deal-by-deal investment strategy, Private Equity International has learned.

Andrew Aylwin, who was responsible for Lyceum Capital’s investor relations and fundraising, has resigned from the partnership, along with Dan Adler, Jonathan Bourn, Geoff Neville, Mark Rogerson, Ian Williams and Martin Wygas, according to a source with knowledge of the firm.

Several of the departing partners will continue to serve on the boards of the firm’s portfolio companies and chairman Philip Buscombe will remain a senior advisor.

Lyceum will be led by Jeremy Hand and Simon Hitchcock as co-managing partners, while directors Adam Lewis, Luke Kingston and Martin Squier will also become partners in the firm, PEI understands. It was unclear from when the changes will take effect.

Lyceum Capital declined to comment.

The firm began informal discussions with investors about raising £375 million ($507 million; €425 million) for Fund IV mid-last year. Fundraising proved tougher than expected, with a number of Lyceum’s LPs unable to commit to the new fund due to their own internal issues and a number of international LPs are also taking a more cautious approach to the UK in the aftermath of the Brexit vote, as PEI reported.

In August, sources told PEI that the European Investment Fund, which invested in Lyceum’s third fund, had halted investments in UK private equity firms until the outcome of the referendum to leave the EU becomes clearer. The decision had left a “reasonably sized hole” in the UK private equity market, according to a placement agent source familiar with the EIF. A spokesman for the EIF denied that a moratorium was in place, saying that “due diligence on them [UK funds] now needs to be more thorough, and take into account a wider range of factors”.

The University of California Regents’ Endowment, which according to PEI data invested $39.6 million in Lyceum’s third fund, has been trying to increase its exposure to private equity at the same time as reducing its number of external manager relationships. In 2014 it had 200 public and private equity external managers, which had been whittled down to 85 by the end of June 2017, while the size of its commitments had increased.

Lyceum’s previous fund, the 2013-vintage £330 million Lyceum Capital III, holds 11 unrealised assets valued at 1.5x cost, the source noted. The firm is understood to have a number of bolt-on deals in the pipeline and will continue to invest in technology and tech-enabled services businesses.

As a deal-by-deal investor, Lyceum will look at broader range of opportunities, including deals outside the UK, deals that are both smaller and larger than the firm’s traditional remit, minority deals and those requiring longer-term capital.

– Alex Lynn, Rod James and Isobel Markham contributed to this report.