Mobeus holds £140m close for first institutional fund

Kenny Wastell
19 May 2017

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Mobeus Equity Partners has held a close for its maiden institutional fund, Mobeus Equity Partners IV, on ТЃ140m.

The development is the latest in a series of rolling closes for the vehicle, which held its first close on £51m in June 2016 and is anticipating a final close by the end of June.

Mobeus – which has historically focused on the management of VCT funds – launched the new vehicle early in 2016 with a hard-cap of £150m. The move came shortly after UK regulatory changes were introduced limiting the types of deals permissible to VCT funds. In particular, the regulations mean VCT funds can no longer take ownership stakes, are limited to investing a maximum of £12m per asset – £20m where the business is judged to be "knowledge-intensive" – and can only invest in companies under a certain age.

The GP is not the only VCT manager that made the jump into institutional fundraising: earlier in May, YFM Equity Partners held a final close for its maiden closed-ended buyout fund, YFM Equity Partners 2016, on £45m, surpassing its target by 50%.

Mobeus mandated Asante Capital Partners as placement agent for the fundraising process. Mobeus managing partner Mark Wignall told unquote" the adviser's involvement was crucial – particularly in terms of raising commitments from international LPs – as the GP itself had not previously been through the process of raising institutionally-backed funds. "We did a lot of travelling over the 12-month period and ended up receiving commitments from three US investors," he said. "I just don't believe we could have done that without a placement agent."

Wignall said the vehicle will have a 10-year lifespan, with a five-year investment period and five-year divestment period. He also confirmed the fund has a vanilla fee structure with a 2% management fee and 20% carry.

For detailed information on Mobeus Equity Partners IV, visit our dedicated fund profile on unquote" data. For a more in-depth look at Mobeus's investment strategy and history, read our recent profile of the firm.

Investors
The vehicle has raised commitments from 10 LPs including pension funds, asset managers, family offices and health foundations. Three of the vehicle's investors hailed from the US, representing just less than 40% of the total commitments, while the remaining seven LPs were European.

According to publicly available documents, the GP has received backing from Bank of Ireland Staff Pensions Fund, Cummins UK Pension Plan Trustee, Derbyshire County Council Pension Fund, East Riding Pension Fund, the Kresge Foundation, the Royal London Mutual Insurance Society, Colorado Health Foundation, Balfour Beatty Pension Fund and the US Bank Pension Plan.

Investments
Mobeus Equity Partners IV has a generalist remit and will make investments of £5-15m in management buyouts. In particular, the firm is targeting investments of £10-12m as it believes it has identified a gap in the market where deal sizes are "too big for the little guys, but too small for the big guys", Wignall told unquote".

To date the vehicle has made two investments, including in product design company Kinneir Dufort and invoice financing company Factor 21.

The GP will continue to make growth capital investments from its existing pool of VCTs.

People
Mobeus Equity Partners – Mark Wignall (managing partner).