Lyceum Capital closes £255m second fund

25 February 2008

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Fund

Lyceum Capital has announced the final close of its new fund, Lyceum Capital Fund II (LCF II), on £255m, substantially exceeding its £200m target. London-based LCF II is the first vehicle raised by Lyceum as an independent player since its spinout from WestLB in May 2006. Lyceum's previous £203m fund is now fully invested. Lyceum embarked on the fundraising process in late February 2007 and held a first close on £175m three months later, ahead of completing fundraising in November last year. "When we started fundraising there was a feeling that the large buyout boom was not going to end and that LPs would permanently be looking for larger funds," comments Lyceum's chief executive Philip Buscombe. "However, the events of the summer meant that not long after our first close we received a lot of enquiries from LPs moving back into the mid-market." The terms and conditions on the 10-year lifespan fund are described as industry standard, with GP contribution totalling 3% of the LCF II. Atlantic-Pacific Capital acted as placement agent for the fundraising and Macfarlanes provided legal advice.

Investors

The new fund attracted investment from 22 institutions and family offices in the UK, US and continental Europe, including AXA Private Equity, GIMV, AP2, AlpInvest, F&C Group and EIF. Six of the investors have re-upped from Lyceum's previous fund and the balance are new investors. Pension funds make up 24% of the investors in LCF II. In geographic terms, 28% of the investors in LCF II are Scandinavia-based; 19% are UK investors and 18% are from North America with the remainder from France, Switzerland and Benelux.

Investments

LCF II will continue Lyceum's strategy of investing in UK-based small and medium-sized companies in fragmented markets. "The operational consolidation aspect of what Lyceum does really appeals to LPs," Buscombe believes. Lyceum is not specifically sector-focused, but will primarily concentrate on the services sector with outsourcing, industrial services and deregulating industries expected to attract attention from LCF II. LCF II will target growth-oriented businesses with an enterprise value of between £20-75m on the platform acquisition. Historically, Lyceum has then completed an average of four add-ons of between £1-30m in value to any one platform acquisition. Lyceum intends to make 12-15 investments from LCF II.

People

Philip Buscombe is the CEO of Lyceum Capital and Jeremy Hand is managing partner. There are currently 11 investment professionals in Lyceum's investment team with plans to recruit two to three more in the coming year.

Name

Lyceum Capital Partners Fund II

Closed on

£255m

Focus

UK mid-market buyouts

Contact

Philip Buscombe

Address

Lyceum Capital Partners LLP

Burleigh House

357 The Strand