Bowmark closes £265m fund in 10 weeks

11 February 2008

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Fund

Bowmark Capital has reached the close of its fourth fund Bowmark Capital Partners IV (BCP IV) on £265m. The latest vehicle closed in January, just 10 weeks after it was launched in mid-October. BCP IV closed oversubscribed on its hard cap and was primarily restricted to Bowmark's existing relationships with approximately 80% of the capital coming from previous Bowmark investors. Bowmark believes that the speed at which it raised the new fund was partly due to renewed appetite from LPs for mid-market funds as opposed to very large funds in light of the current liquidity crisis. In addition, Bowmark's strong position in the lower mid-market, with the previous fund reported to have so far generated an average IRR of over 40%, contributed to demand for the fund when it was brought to market. BCP IV is structured as a 10-year vehicle with a six-year investment period. Its terms and conditions were described as industry standard with 2% management fees, carried interest of 20% and a GP contribution of 1%. The minimum subscription to the fund was £5m with an average commitment of approximately £10m. Campbell Lutyens & Co acted as sole financial adviser and placement agent. SJ Berwin acted as UK legal adviser and Ropes & Gray as US legal adviser.

Investors

In total, 23 investors committed to the fund. Of the capital 48% came from continental Europe, 35% from the US, 13% from the UK and 4% from the rest of the world. In terms of the type of investor, 30% of the capital was sourced by pension funds, 29% came from fund-of-funds, 22% from insurance companies, 10% from endowments and family offices and 9% was invested by investment managers.

Investments

BCP IV will continue Bowmark's strategy of active investment in growth-oriented service companies with enterprise values of up to £75m. The size of the deal being targeted is slightly larger than the average size of investments made by Bowmark's third fund, but is consistent with the size of deals the third fund has completed in its latter stages. It is 85% invested. Bowmark intends to invest £10-20m per transaction in 12-15 companies. It has the ability to complete growth capital deals, but will primarily acquire controlling stakes in businesses. Its chief focus will be on five sectors: business services, leisure, healthcare services, media and IT services.

People

Kevin Grassby and Charles Ind are Bowmark's managing partners.

Name: Bowmark Capital Partners IV

Closed on: £265m

Focus: UK buyouts and growth capital

Contact: Charles Ind

Address: Bowmark Capital LLP, 3 St James's Square, London SW1Y 4JU, UK

Tel: +44 20 7189 9000

Fax: +44 20 7189 9044

Advisers: SJ Berwin (Legal); Ropes & Gray (Legal); Campbell Lutyens & Co (Placement agent).