Phoenix clinches debut deal for new fund

The firm is currently in market seeking around £500m for its latest mid-market vehicle.

UK mid-market firm Phoenix Equity Partners has struck its first deal from its fourth fund, investing in The Travel Chapter Group.

The UK online holiday lettings platform is understood to have an enterprise value of around £30 million ($43 million; €38 million), and sits at the smaller end of the firm’s investment range of £20-200 million in enterprise value.

The firm targets equity investments of £20 million to £50 million in companies in the business services, leisure and consumer, financial services, healthcare and education, industrials and media sectors.

“Travel Chapter is a fast-growing, innovative business operating in an attractive market,” said Phoenix Equity managing partner David Burns in a statement. “We are delighted to be partnering with James and his team and we look forward to working with them to accelerate the growth of the business.”

Phoenix has invested in the company alongside existing chief executive officer James Morris, who has made a “substantial reinvestment”, the statement said. The business was founded by the Morris family in 1989.

Phoenix Equity Partners is currently fundraising for its latest vehicle, which is understood to be targeting around £500 million. The fund has reached a first close on £250 million, according to reports in March.

Its previous vehicle, Phoenix Equity Partners 2010, raised £450 million. Investors in that fund include the Colorado Public Employee’s Retirement Association, the New York State Teachers’ Retirement System, AlpInvest Partners and Adams Street Partners, according to PEI Research & Analytics.

In November, the 2010 fund partially exited its investment in The Gym Group through an initial public offering of 50 percent of the low cost gym operator’s shares on the London Stock Exchange, as reported by Private Equity International. The sale generated a realised and unrealised return of 2.5x cost and an internal rate of return of 47 percent.