Zeus closes first fund on £100m

28 January 2008

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Fund

Zeus Private Equity has held the final close of its first fund on its target of £100m. The Manchester-based fund was launched in April 2006 before holding a first close on £50m before the end of that year and a second close in June 2007 on £65m. The fund is structured as a traditional 10-year investment fund with a five-year investing period. Managing partner Gary Tipper set up Zeus with two partners, all of whom were previously at Aberdeen Murray Johnstone Private Equity. He described the process of raising a first time regionally-based fund as "not a walk in the park", but commented that "since the credit crunch there has been more appetite from investors because the summer's events demonstrated that there is a place for smaller, more niche funds". Christian Dummett, formerly of Merrill Lynch, acted as a placement agent to the fund in the UK and SJ Berwin provided legal advice. Zeus also used Bentley Associates as a placement agent in the US.

Investors

More than 40 investors made commitments to the Zeus fund including institutional investors Hermes, Alliance & Leicester, Access Capital Partners, Macquarie Investment Management, New Star Private Equity Investment Trust Plc, several local authority pension funds and 30 private investors. Zeus's investors were primarily UK-based with a small number from the US, Australia and mainland Europe.

Investments

Zeus will focus on investing in companies based in the UK regions that have strong regional brands or franchises and are capable of being developed into national businesses. Investing between £5-10m of equity per deal, Zeus will look to acquire portfolio companies with an enterprise value of up to £50m. Zeus will undertake buyout deals looking to take majority stakes in companies. It also foresees investing in buy-and-build strategies. The firm has completed four deals to date - including the buyout of Morecambe-based online floral and gifting company (19 November 2007, page 35), an investment in a buy-and-build deal in the UK hotel sector alongside Hermes Private Equity (5 November 2007, page 36) and the £22m acquisition of networking services company Electranet. It is also in the due diligence stages of two other deals.

People

Gary Tipper is managing partner of the fund he co-founded with fellow partners Ed Fazakerley and Tony Dickin. Zeus has its head office in Manchester and a second office in London, headed by Dickin.

Name: Zeus Private Equity Fund

Closed on: £100m

Focus: UK regional buyouts

Contact: Gary Tipper

Address:

21 Ralli Courts

West Riverside

Manchester M3 5FT

Tel: +44 161 214 4730

Fax: +44 161 839 2816

Advisers:

SJ Berwin (Legal)