Bowmark Capital, a UK-focused private equity house, has closed its sixth flagship fund on target after adapting its sector focus in response to Brexit.
It took the mid-market firm 10 weeks to collect £600 million ($756 million; €666 million) for Bowmark Capital Partners VI, according to a statement. Fund VI was significantly larger than its £375 million predecessor, a 2013-vintage vehicle.
Existing Bowmark investors contributed 94 percent of the capital, the statement said. By region, continental limited partners accounted for 44 percent of the fund, with North American and UK LPs committing 35 percent and 5 percent respectively. It attracted 23 institutional LPs.
A key topic of conversation with LPs was how UK firms are preparing for Brexit, managing partner Charles Ind told Private Equity International. He identified the tightening of labour markets as the single biggest risk to some sectors, but pointed to business services and media companies as being more resilient with long-term growth prospects.
“We are and have been doing less in consumer and healthcare recently; we’re more careful about investing in those sectors. We’re adapting our focus on certain sectors and refining it on others.”
The firm typically targets businesses with enterprise values of up to £200 million, the statement said. Bowmark’s portfolio includes internet service provider ASK4, legal services firm LOD, and workplace solutions business The Instant Group.
UK private equity veteran Dick Hanson called time on DH Private Equity Partners last year, having failed to gets its new fund off the ground. Fellow UK buyout firm Terra Firma Capital Partners, meanwhile, has seen its fundraise hit the skids after LPs asked to see a demonstrable track record from its deal-by-deal activity before committing to a blind-pool vehicle.
The UK was knocked from its perch as Europe’s top private equity market last year. UK spending dropped by one-third to €21.4 billion, the first time since 2011 that it has not been in pole position.
The “pausing” of UK transactions in the latter half of last year could lead to a flurry of activity if and when terms of its EU exit become clear in March, though some have suggested a lack of interest from certain quarters could lead to cheaper deals.
“[Brexit] might take some heat out of the market,” Ind said.