Gresham to wind down

Gresham had announced it would be raising a new fund, targeting £150m, at the start of the year. The newly launched fund, which was to be significantly smaller than its £340m predecessor, coincided with confirmation of Gresham chairman Paul Marson-Smith's retirement.

In a statement, Gresham CEO Simon Inchley said that despite Gresham's fourth fund starting out in a difficult economic environment (Gresham 4 closed in 2006), the team has managed to lead a recovery in its valuation and liquidity generation. However, Inchley went onto say that the firm "will not be able to raise a sufficiently large fund in an acceptable timeframe."

Gresham has indeed made some impressive realisations over recent months, with the sale of ICR generating a 4x return, Hotter Shoes, which made a 3.7x return, the sale of LAS returning 2.7x and Swift achieved a 2x return.

The departure of Marson-Smith, as well as partner Dan Hatcher earlier this year, came in the wake of six further partner exits. Last year, partners Antony Bull, Mark Blower, Mike O'Brien, Gary Ward and Andy Tupholme all left the firm. The mass exodus was an early warning sign of difficulties suffered by Gresham.

The winding down of Gresham is also symptomatic of the increasingly tough environment for UK private equity, with many large institutional investors no longer able to invest in the asset class for regulatory reasons or reducing the number of their GP relationships. The long-awaited industry shake-out is now becoming a reality.

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