Beechbrook Capital to launch fund for UK small and medium businesses

Fund is looking to raise between £100m and £200m to back mid-market companies with turnover ranging from £5m to £50m

Direct lender Beechbrook Capital is to launch a fund to support British small and medium-sized businesses with a turnover of between £5m and £50m.

Beechbrook’s new fund intends to raise between £100m and £200m and target senior secured loans in non-private equity-backed UK companies.

With a first close planned for October 2015, the fund will build on Beechbrook’s existing funds, which invest in private equity backed companies in the UK and abroad. It is estimated that there is up to 40,000 British businesses in the company’s chosen target range.

The lender currently manages two debt funds with combined assets under management of around €250m, this includes Beechbrook Mezzanine II fund which closed in July 2014 at €151m with pledges from the European Investment Fund and the British Business Bank among other private sector investors.

In preparation for the first close, Beechbrook has appointed Jon Herbert as managing director and Jon Penfold as a member of the advisory board and committee, with a combined 60 years of experience in the relevant field between them.

Paul Shea, Beechbrook Capital partner, commented: “The UK small and medium-sized business Credit Fund is a natural evolution for Beechbrook. We have received numerous requests for funding of this type from accountants, solicitors and corporate finance advisers around the country, who are acutely aware of the shortage of long-term development and expansion finance currently available to UK small businesses.

“While there are numerous other credit funds in the market, these generally target larger companies. Our two new hires bring unrivalled experience of this market and a wealth of contacts. With them on board, we look forward to playing a constructive role in helping fund the growth of UK mid-market companies.”

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