Cairngorm names new MD in green push, mulls fundraising in 2023

Anstead joins the Edinburgh-based GP after an 8-year stint at impact investor EV Private Equity. He has over 20 years of experience both as an executive and investor in the UK, European, US, and Canadian markets, working with businesses that are transitioning to sustainable forms of energy and emissions reduction, according to a statement.

“Energy transition has been an interesting theme for us for a couple of years now, but we came to the conclusion that it made sense to bring somebody in with specific expertise to really drive that forward,” said McGill.

Subsectors within this theme can include products or services relating to electrification transition, as well as energy efficiency topics such as connected home, HVAC, and heat pumps, among others, he said.

Cairngorm’s move to energy-efficient products for residential and commercial applications will not be a “huge leap” from some of its existing businesses such as manufacturing and distribution of building material products, as well as related services in repair, maintenance, and improvement, McGill said.

Maria Mikhailova, Cairngorm Capital

Anstead joins Cairngorm alongside Maria Mikhailova, who is relocating from Kyiv to join as an investment advisor from Diligent Capital Partners, a private equity firm with focus on Ukrainian agribusiness, export, and technology investments, the statement said.

Mark Robson, Cairngorm Capital

Mark Robson also joins the fund as an investment associate from Deloitte’s Edinburgh M&A advisory team. He will contribute towards sourcing new opportunities, executing transactions, and supporting the management teams of portfolio companies, the statement added.

Fundraising and deployment plans

The GP is currently investing from Cairngorm Capital Partners III, which closed at GBP 200m last August. The vehicle has the capacity to invest in one to two more platform companies, as well as further bolt-ons, McGill said.

Cairngorm is currently busy across its existing portfolio with more than 10 ongoing bolt-on transactions for its companies, he said.

Fundraising for a fourth fund is also expected to launch next year and could be larger than the incumbent strategy, he added.

Its move into green transition investments is part of the fund’s wider diversification move beyond its initial investments in previous vehicles, which were more weighted in sectors such as the building materials sector, he said.

Other new areas where it is investing are wealth management, he said, noting its investment in Verso. It has also explored other fields including leisure sports via its investment in e-bike brand Whyte Bikes.

Geographically, it can also explore deals opportunistically in the US following its latest investment in Sagehome, based in Indiana. Investment director Stuart Whiteford is currently based in the US and can provide on-the-ground coverage for the market, he added.

“As we think about developing our firm in the future, we brought in some talented individuals, some of whom have their own specific areas of expertise, which is leading towards this diversification,” McGill said.

On exits, Cairngorm is now considering an optimal time to exit some of its larger and established investments in its first and second fund, he said.

“We are keeping an eye on the wider macro environment and picking the best time to exit assets. We'll continue to think about that in the next 12 months,” he said.

While its portfolio companies are largely in good shape, the macro picture is “pretty challenging”, he said, noting that all companies are going to face inflationary pressures, with the effects already spilling into some of its portfolio companies.

“We just need to be very disciplined around pricing in the current environment. It's hard to form a view on sustainable earnings in the current environment with inflationary pressures coming through,” he said. “We will rely on our insights into market sectors we know and understand and support this through due diligence.”

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