Notion IV to close in 2020 above £125m target

The fund held a first close on £75m in October 2019, following its registration in May 2019, and has a hard-cap of £175m.

LPs in the fund include Nuclear Liabilities Fund, Pentland Group, Pool Reinsurance Company, Pruger Investments, Key Capital, Danish pension fund Industriens Pensionsforsikring and British Patient Capital.

Management fees are 2.25% with a 20% carry rate and a 5% kicker should the fund achieve net returns above 4x.

The fund will focus on software-as-a-service companies in the financial services, healthcare, insurance, agriculture and legal sectors with annual recurring revenues of more than €1m. The fund will write initial equity cheques of €1-8m and will avoid seed and early-stage rounds. Investments to date include Claimsforce, a developer of insurance claims management software.

Notion IV will make 20 investments with an expected holding period of seven years on average, and of up to 10 years. Notion expects to invest 50% of the raised capital in UK companies and the rest in other European companies.

Upon the fund's first close, the firm also announced its intention to launch a second growth opportunities fund in 2020, though it is unclear if the coronavirus crisis has interrupted these plans. Notion Capital Opportunities held a first close on $80m in 2017 and provides equity for the highest-performing companies in Notion's portfolio.

Osborne Clarke is acting as legal adviser.

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