First-time fund Cairngorm hits £50m final close

Alice Murray
02 September 2015

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Cairngorm Capital, a new private equity firm set up by former HIG Capital executive Andrew Steel, has closed its debut fund on its target of ТЃ50m.

The new fund, Cairngorm Capital I, has reached a first and final close and is now seeking to invest in industrial and B2B companies in the UK lower-mid-market.

It is understood the fund received substantial interest from investors, resulting in the GP selecting preferred LPs.

The new GP is named after Scotland's Cairngorm National Park and was set up by Steel, previously a founding member of HIG's London team from 2007-2013. Prior to that, he was director of business development at Home Depot in the US. During the 1990s, Steel held several management roles at Caradon.

Cairngorm's chairperson, Lee Hess, is also the co-founder and chairperson of US-based Installs, a provider of installed home services for US retailers, including Costco, Best Buy and Dell. Hess is also an executive committee member of Ohio Tech Angels Funds I, II, III and IV. Previously he was senior vice-president of Wendy's International.

It is almost unheard of for a one-man team to raise this amount of capital for a first time fund. The impressive fundraise can be seen as a reflection of investor appetite for genuine operational expertise, as the majority of Steel's career has been focused on operating companies (he headed up a window manufacturer in Tennessee when he was just 25), according to a person familiar with the situation.

Acanthus acted as placement agent for the fund.

Investors
The fund received commitments from two European funds-of-funds and a US university endowment fund.

Investments
The newly-raised vehicle will target industrial and B2B companies operating primarily in the manufacturing, distribution and service sectors in the UK lower-mid-market.

According to Hess, the fund's key strategy is to employ a disciplined approach to investment selection and to support management teams in operational improvement. The fund will also look to grow businesses through buy-and-build strategies.

The fund will deploy equity checks of £10-15m.