Royal London to spin out, rebrand

The lower midmarket private equity firm has been renamed RJD Partners as it begins the process of spinning out from The Royal London Mutual Insurance Society Limited.

UK lower middle market private equity firm Royal London Private Equity (RLPE) is in the process of being spun out from its parent company, The Royal London Mutual Insurance Society Limited (RLMIS).

Chief executive David MacLellan, managing director John Dillon, and executive directors Richard Caston and Duncan Johnson are to increase their joint shareholding in the firm to 85 percent for an undisclosed sum, with RLMIS retaining a 15 percent stake.

As part of the change of ownership, the firm was renamed RJD Partners yesterday.

MacLellan: Going independent

RLPE was founded in late 2001 by MacLellan and closed its first fund, RL Private Equity Fund, in April 2003 on £75 million (€111 million; $130 million). MacLellan told PEO that RL Private Equity Fund is now around 70 percent invested but refused to comment on any future fundraising plans.

MacLellan said that RJD Partners will continue RLPE’s strategy of investing in lower middle market companies in the UK through management buyouts and expansion capital investments. The firm will also remain focused on the service and leisure sectors, targeting companies with enterprise values of between £10 million and £75 million. “It’s absolutely business as normal,” said MacLellan. “All that is changing is the name and the ownership.”

The increased shareholding by the principals was partly a reflection of the company’s success, said MacLellan, but is also designed to make the company more attractive to investors. “We wanted to show greater independence, and investors in funds like to back successful, independent private equity houses,” he added. MacLellan declined to name current investors, but said that they were UK institutions.

RLPE’s most recent transaction was the acquisition of a majority stake in UK debt recovery agency Equidebt for £50 million in September as part of a placement alongside Equidebt’s founders.