Beechbrook Capital has launched the fundraising for its third private debt fund, Private Debt III, with a target of EUR200m-plus. First close is targeted for the second quarter of 2016, with a final close planned for later in the year.
The third fund will follow the same successful investment strategy as the previous funds by providing private debt, including mezzanine and unitranche, to lower mid-market buyouts in northern Europe. The Fund aims to deliver a low volatility running yield with attractive risk-adjusted returns. There is already a growing pipeline of investment opportunities for the new fund.
Fund II, which reached its hard cap of EUR150 million in May 2014, is now more than 80 per cent invested and is on track to be fully invested by the end of its investment period in May 2016. Beechbrook has recruited five new people since the launch of Fund II, further strengthening the team.
Beechbrook has made 33 investments to date. Among the most recent investments was a unitranche loan and equity co-investment to FirstCom, a telecoms software business, to help finance an acquisition in Denmark. Beechbrook made a total investment of EUR7.1m, alongside an equity investment from Oakfield Capital.
Beechbrook completed its eighth full exit in February 2016 through the sale of Alpha Financial Markets, a consultancy to the asset and wealth management industry, by Baird Capital to Dunedin. After two exits, Fund II has already returned almost 30 per cent of drawn capital to investors.
Beechbrook’s private debt funds provide tailored financing solutions to private equity buyouts in northern Europe to fill a gap in borrowers’ capital structures. The target borrowers typically have sales of EUR5m to EUR100m and Beechbrook’s investment tickets range from EUR4 million to EUR15 million.
Paul Shea (pictured), the firm’s Managing Partner, says: “The lower mid-market in northern Europe remains highly attractive with many quality companies and investment opportunities. Despite increased availability of bank finance we are continuing to find unfulfilled demand for buyout financing. We continue to strengthen the team and look forward to working with new and existing investors to achieve their goals.”
