Beechbrook holds £100m first close for SME credit fund

JosУЉ Rojo
04 January 2016

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Beechbrook Capital has reached a first close on ТЃ100m for its maiden SME-focused credit fund, with commitments from British Business Bank Investments and the European Investment Fund (EIF) among others.

Featuring placement agent Arbour Partners, fundraising for UK SME Credit Fund kicked off in July 2015. At the time, managing partner Paul Shea told unquote" the vehicle responded to increased demand for dedicated senior financing among non-private-equity-backed UK SMEs.

According to Shea, the fund aims to fill the gap left behind by both traditional lenders and fellow credit funds, which have typically focused on larger businesses. The strategy mirrors that of alternative lender Kartesia Advisor, which has put it to work across the European mid-market since spinning out of LBO France in August 2013.

The vehicle succeeds Beechbrook's three private debt-focused vehicles, which have raised a combined £251m since launch and target private-equity-backed assets in the UK and northern European lower-mid-market.

Investors
Commitments towards the fund's first close were received from British Business Bank Investments and EIF, among other institutional LPs.

According to Beechbrook, further capital has been secured in the run-up to a second close for the vehicle in Q2 2016.

Investments
UK SME Credit Fund will supply £3-15m senior secured loans to UK non-private-equity-backed SMEs. Opportunities will be considered out of a pool of 40,000 businesses where turnover sits in the £5-50m region.

Work is currently underway around a number of investments, the first of which is predicted to take place early this year, according to Beechbrook.

People
Beechbrook managing director Jon Herbert will lead the team overseeing the new fund, followed by investment directors Tim Johnston and Peter Kirtley and new advisory board member Jon Penfold.