INVESTMENT STRATEGY<br/>Keeping it in the family

Clothing store C&A disappeared from the UK high street in 2001, but the family behind the clothing retailer – still going strong in many other markets around the globe – has kept its presence in the country through sizeable commitments to private equity. A further €1 billion commitment to the asset class in November sent a clear message that it is not in retreat mode.

Until now the Brenninkmeijer family, via its investment platform Bregal Investments, has been investing via sizeable commitments to just three managers. Its relationship with these GPs has been unusual. For example, it has traditionally represented around 90 percent of the investor base at London-based mid-market GP Englefield Capital – committing €650 million of the €700 million raised by Englefield's first fund in 2003 and €900 million to its €1 billion successor.

It emerged in November that Dominic Shorthouse, who founded Englefield along with Edmund Lazarus and Adam Barron, would be parting company with Bregal and raising a new fund. Shorthouse will take the Englefield Capital brand name with him to his new venture, while Lazarus and Barron would continue under the new moniker of Bregal Capital (complete with a new €1 billion commitment from the Brenninkmeijers).

“The family decided that they wanted to have control. They like the asset class, they like what we built and it's only natural evolution that they decided they want to own all of it,” Shorthouse told sister website PrivateEquityOnline, adding that his departure had come a “little earlier than expected”. Bregal has agreed to back the former Warburg Pincus executive's next fund, but not on the same scale as its Englefield commitments.

While Shorthouse has been bought out of the original management company, Lazarus and Barron have not crystallised nor sold their interests in the company, says Lazarus.

A number of smaller limited partners in Englefield's existing funds have received an offer from Bregal to buy their stakes. This is because, as personal contacts of Shorthouse, they may want the option of leaving along with him, said Shorthouse, who has decided to retain his own interests in the funds.

The newly christened Bregal Capital will be led by Barron, formerly of Warburg Pincus and Goldman Sachs, and Lazarus, formerly of Morgan Stanley Capital Partners. The two, who were European co-heads of Englefield, will oversee the deployment of around €1.5 billion in dry powder.