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Palatine collects £50m for impact investment fund

Beth Houghton of Palatine Private Equity — Beth Houghton, Palatine Private Equity

Greg Gille
@unquotenews
11 January 2017

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Mid-market player Palatine Private Equity has held a first close for its first ever impact investment fund, unquote" has learned.

The vehicle held a first close on £50m in December 2016, around 10 weeks after its formal launch, according to a source close to the situation. Palatine declined to comment, given that it is still fundraising for the vehicle. A final close is expected to take place in the first half of this year, the source added. The fund has a £75m target, with a hard-cap of £100m.

Evercore is acting as sole placement agent for the fundraise.

Several of Palatine's existing LPs are understood to have committed to the vehicle at first close. They were joined by a number of other institutional investors, including UK public and corporate pension funds.

The fund will target businesses requiring equity tickets of less than £10m, with a focus on delivering positive social impact. It is unknown at this stage how many companies the fund will ultimately back.

The fund will be managed separately from the GP's other vehicles. The effort will be led by Beth Houghton, a partner who heads up environmental, social and governance policy for Palatine. She will be assisted by Zoe Clements, who joined Palatine as partner from Electra in November last year.

In addition, Palatine has recruited former LDC adviser Tim Farazmand to chair the new fund. In addition to his 12-year tenure at LDC, Farazmand was BVCA chair from 2014 to 2015. He also took a seat on the advisory board of alternative debt provider Beechbrook Capital in 2016 and currently chairs the BVCA Impact Investment Committee.

unquote" caught up with Palatine for an in-depth profile earlier this year. At the time, the GP stated it was set to fully realise its first fund by the middle of 2017. Fund I closed on £100m in 2007 and is fully deployed with only two investments left. It has so far generated a 2.5x gross return multiple and 27% IRR. Fund II closed on £150m in 2013 and is fully invested in 11 deals.