YFM holds first close for new closed-ended fund

Greg Gille
15 June 2016

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YFM Equity Partners has held a first close on ТЃ22m for YFM Equity Partners 2016 (YFMEP 2016), a new closed-ended fund complementing the firm's existing VCT vehicles.

YFM launched the new vehicle three months ago and is aiming to raise an additional £10-15m for the fund, which will have a shorter, two-year investment phase compared with usual private equity vehicles. Adding YFMEP 2016 to the firm's existing VCT funds means YFM has a combined investment capacity of around £100m across growth capital and buyout opportunities.

VCT managers have had to adapt to changing regulation in this segment of the market; one of the most significant changes is that buyout investments are now off-limits for such vehicles, in addition to a stricter limit on the maximum age of companies that can be backed. This has led managers to seek out new ways to keep offering such investment opportunities to their existing clients, which was a key driver behind YFM launching its new vehicle.

YFM is understood to have placed the fund without the help of an agent.

Investors
So far, YFM has marketed the fund to its existing pension fund clients, who can no longer be exposed to buyout opportunities via the firm's VCTs. In addition, YFM stated it had attracted commitments from new family office backers.

Investments
YFMEP 2016 will target profitable businesses in the UK. In order to offer greater liquidity and less cash-drag to investors, the fund will have a shortened investment period of two years, during which fees will only be applied upon the draw-down of LPs' capital.

People
YFM Equity Partners – David Hall (managing director).