Vision Capital, the London-based investor specialising in secondary direct portfolio acquisitions from private equity investors, has followed up last year’s acquisition of a portfolio from Morgan Grenfell Private Equity with the purchase of the entire portfolio of the CS Structured Credit Fund.
The transaction comprises a portfolio of controlling stakes in Avebury Taverns, which owns over 700 UK tenanted pubs, and the Elegant Hotels Group, with a chain of five luxury hotels in Barbados. It also includes interests in Roadchef, the motorway service station operator, Resource Partners Group, a UK financial services company, and Cabot Financial, the purchaser of under-performing consumer debt, which was acquired in a deal led by Barclays Private Equity earlier this month.
“The transaction came out of private discussion with investors,” said Julian Mash, chief executive of Vision Capital. “The sale of whole portfolios, rather than individual companies, provides [managers with] a comprehensive exit solution which is attractive to investors.”
The portfolio companies are being acquired by a new investment partnership with £100 million (€149 million; $187 million) of committed capital, established and managed by Vision Capital. The lead investors in the partnership are Goldman Sachs Private Equity Group’s GS Vintage Funds, together with funds managed by Landmark Partners. A number of other investors will also commit capital to the new partnership.
Last year, Morgan Grenfell Private Equity sold four portfolio companies to Vision Capital in a deal that was also underwritten by Goldman Sachs Private Equity Group. Vision Capital is thought to have paid in the region of €100 million for the assets, which included significant investments in three businesses, Deloro Stellite Group, Abrasive Technologies Holding and AB Cerbo Group, and a fourth, smaller investment in Shearings Group.
Vision Capital was founded in 1997 by Julian Mash, formerly deputy head of European Investment Banking at Smith Barney who started his career at Goldman Sachs. Since its inception, the firm has completed over 20 transaction and advisory assignments including 10 private equity and portfolio company transactions.
CS Structured Credit Fund is managed by Cabot Square Capital, the London-based firm which last year closed its second fund, CS Capital Partners II, at E284m, ahead of an original E250m target. The fund will invest in small to medium size companies across UK and Western Europe.