August Equity to target GBP 400m in fundraise for upcoming sixth fund

The upcoming August Equity Partners VI vehicle will be one third larger than its existing fifth fund and will largely follow the GP’s existing strategy, targeting small UK businesses generating GBP 1m-GBP 5m EBITDA with specialisms in healthcare, education, business services and technology, the source said.

August Equity Partners V, which held a final close on GBP 300m in 2020, has deployed around 60% of its dry powder, the source said.

BMO Global Asset Management, Argentum, M&G and BNP Paribas Private Equity are among the 25 LPs to participate in the fundraising of the fifth fund, US-based investors committed USD 170.5m to the fundraise, more than 40% of the capital in the fund, according to Unquote data.

The GP’s latest investments from Fund V include Anderson Anderson & Brown, a Scottish tech-enabled professional services group; veterinary care group Medivet, in which August co-invested alongside CVC Capital Partners; and cyber security specialist Integrity360.

August primarily invests in small primary buyouts, which could help it shelter away from volatilities inherent in live auction processes and market movements, the source said.

Exit track record

The sponsor has been focused on exiting some investments held in its GBP 224m Fund IV vehicle this year, including accredited certification specialist Amtivo, energy and sustainability services provider Zenergi, and dentistry clinic chain Dental Partners.

Exits for the remaining seven businesses in Fund IV could be forthcoming over the next three to four years, the source said.

August does not expect further exits for the remainder of this year, with the GP looking instead to recapitalise some of its businesses to take advantage of strong growth opportunities, the source said.

Earlier this year, the GP moved portfolio company Orbis Education & Care into a continuation fund, effectively expanding the exit horizon of the UK-based specialist care and education group, according to Mergermarket. This move, which was carried out at the end of last year, should give the sponsor a new exit window of four to five years to explore further inorganic and organic growth.

August declined to comment.

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