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Specialist direct lender Beechbrook Capital has held a final close of its inaugural UK SME Credit fund with commitments in excess of £150m. The fund has completed two new investments.
Beechbrook Capital UK SME Credit I, which backs small and medium-sized businesses in the UK with a turnover of between £10m and £100m and EBITDA of more than £1m, has attracted investors from across the UK, Continental Europe and North America.
Nick Fenn, Beechbrook managing partner, commented: “We are delighted that investors continue to see the attractiveness of high-quality investment opportunities among UK SMEs, where we see a continuing shortage of long-term development and expansion finance.”
The final close was supported by a combination of new and existing investors. British Business Bank Investments Ltd has increased its commitment.
Catherine Lewis La Torre, CEO of British Business Bank Investments Ltd, commented: “We have supported Beechbrook and its experienced management team for a number of years through our Investment Programme. In line with our aim to support diverse debt finance markets, we are pleased to be participating in the latest round of Beechbrook’s UK SME Credit fund. The new fund’s focus will help address the well-recognised funding gap for loans between £3m and £15m.”
The fund’s most recent investments are unitranche loans to 2Excel Aviation, an innovative business in the aviation sector, and Cloud Direct, a cloud migration and management company, to support the two groups’ respective growth strategies. These are the fifth and sixth investments made by the fund, which is already more than 30 per cent committed.
Founded in 2005 by two ex-RAF pilots, Andy Offer and Chris Norton, and based in Northampton, 2Excel provides solutions to challenging aviation problems. Operating across sectors including defence and security, engineering, agriculture, travel and the oil and gas industry, 2Excel’s customers include the Ministry of Defence and the Home Office along with major airlines and blue chip corporations. It currently manages a fleet of 24 aircraft, 30 long-term contractors and more than 150 staff across eight sites.
Bath-based Cloud Direct, founded by chief executive Brett Raynes in 2003, has helped 4,000 small to midsize businesses switch to cloud computing. Currently employing 100 people, and with recurring revenues around £10m, it has had continuous profit growth and has completed five acquisitions to date.
Meanwhile, Beechbrook Capital is planning to open its first regional office, in Manchester. Jon Herbert, Beechbrook managing director of the UK SME Credit fund, said: ‘The Manchester office, which is scheduled to open in the first half of 2017, will increase our ability to meet the strong funding demand from UK SMEs and will facilitate closer relationships with the firms we back and their advisers.’
For further information, please contact:
Paul Shea, Beechbrook Capital, 020 3551 5971, paul.shea@beechbrookcapital.com or
Jon Herbert, Beechbrook Capital, 020 3551 5965, jon.herbert@beechbrookcapital.com
Caroline Cecil, Caroline Cecil Associates, 020 7610 4110, ccecil@carolinececil.co.uk
James Pignon, MHP Communications (for British Business Bank Investments Ltd), 020 3128 8755, bbb@mhpc.com
Scott Shearer, British Business Bank Investments Ltd, Scott.Shearer@british-business-bank.co.uk
Beechbrook Capital, a specialist direct lender founded in 2008, invests in SMEs across a range of industries in the UK and across Europe. Beechbrook’s three private debt funds support northern European private equity-backed companies with a typical enterprise value of €10m to €100m, investing an average of €8m to €9m per transaction.
The Beechbrook UK SME Credit fund provides finance to non private equity backed UK SMEs. Its investments include Chinese takeaway business Hotcha, trampoline parks operator Oxygen Freejumping, comic convention business MCM Expo Group and 4Most Group, a company providing regulatory and credit risk analytics consultancy to banks, credit card providers and other businesses with consumer credit exposure.
The finance Beechbrook provides often fills a funding gap between equity and bank debt faced by SMEs as banks focus on large corporates and capital market activities. Beechbrook is backed by institutional investors who are drawn to the attractive, risk-adjusted returns it generates. The firm has completed more than 40 investments in growing European businesses since 2010.
British Business Bank Investments Ltd is the commercial arm of the British Business Bank. It aims to earn a commercial return by investing – through finance providers – in smaller businesses and small mid-caps, pursuing investments on a fully commercial basis without receiving any advantage from the government. Find out more at www.bbinv.co.uk
British Business Bank Investments Ltd is a wholly owned subsidiary of British Business Bank plc, the UK government’s economic development bank, registered in England and Wales, registration number 09091930, registered office at Foundry House, 3 Millsands, Sheffield, S3 8NH. Neither entity is authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA).
British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.
Businesses can find out more about their funding options, including venture capital, by accessing the Business Finance GuideLink opens in a new window. Published by the British Business Bank in partnership with the ICAEW and a further 21 business and finance organisations, the guide impartially sets out the range of finance options available to businesses – from start-ups to SMEs and growing mid-sized companies. Take the interactive journey, or download/print a copy, at www.thebusinessfinanceguide.co.ukLink opens in a new window
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