Bowmark holds final close for sixth fund on £600m target

Kenny Wastell
03 January 2019

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Bowmark Capital has held a final close for its sixth fund, Bowmark Capital Partners VI, on its ТЃ600m target after just 10 weeks on the road.

The value of commitments is a 60% increase on the vehicle's predecessor, Bowmark Capital Partners V, which held a final close on £375m in 2014.

The fund closed shortly before Christmas, Bowmark managing partner Charles Ind told Unquote, with LPs undeterred by the ongoing political uncertainty in the UK. "There has obviously been a lot of noise about Brexit," Ind said. "But while it will present challenges, it will also bring opportunities, as any uncertainty inevitably does. This fundraise is testament not only to our investors' confidence in Bowmark as a fund manager, but also in the wider UK market."

The GP opted to raise a larger fund on this occasion as it had found itself regularly raising co-investments in order to meet the equity requirements of the businesses it wanted to target, Ind said. However, the new fund will also continue to offer co-investment opportunities to LPs.

The vehicle has a standard management fee structure of 2% with 20% carry and an 8% hurdle, Ind told Unquote.

Campbell Lutyens acted as exclusive financial adviser on the fundraising, with Stephenson Harwood providing UK legal advice and Pepper Hamilton providing US legal advice.

Investors
In total, Bowmark VI received commitments from 23 institutional investors, with 33% of the total value accounted for by pension funds, 26% by insurance companies, 19% by funds-of-funds, 12% by other financial institutions and 10% by endowments, foundations and family offices. Geographically, 44% of capital committed was from continental European investors, 35% from North American LPs, 5% from the UK and 16% from the rest of the world.

The fund received 94% of its commitments from existing investors, with a small number opting not to recommit due to non-Bowmark-specific reasons, Ind said, including allocation-related factors. According to Unquote Data, investors in Bowmark's fifth fund included Kuntien Elakevakuutus, JP Morgan Asset Management, Elo Mutual Pension Insurance Company, OPSEU Pension Trust, Pathway Capital Management, Schroder Adveq and AlpInvest Partners.

Investments
The vehicle will target UK mid-market companies with enterprise values of up to £200m. It will have a particular interest in technology-enabled B2B companies and look to pursue nationwide and international growth strategies.

Bowmark VI will primarily make majority investments, though it will also consider minority positions. It will make 10-15 deals and a typical equity cheque will be in the region of £50m.

Ind anticipates the new fund will start deploying capital early in 2019, once Bowmark V has with made "one or two" more investments. The predecessor vehicle is now around 80% deployed, he said.

People
Bowmark Capital – Charles Ind (managing partner).