Private equity house eyes Nottingham office

Jon Pickering

Northedge, the Manchester-based private equity house with £525m funds under management, says it is looking at opening an East Midlands office.

Formed in 2009 to service the market within a two-hour drive of Manchester, it opened its Leeds office in 2012 and, following the closure of its £300m Fund II in March, set up its first base outside of the North with the opening of its Midlands office in Birmingham office in October.

Now, the firm says it is looking to open in the North East and Jon Pickering, head of its Manchester office, suggested that the firm may also consider opening a fifth office to service the East Midlands separately.

“We keep deals local and use local advisers to keep the deal flow within the local community,” said Pickering.

“Deal flow is starting to show through in the Midlands and the local adviser base has responded well to that, which ensures fees stay local.”

But he was unequivocal in saying there are no aspirations for the firm to expand its footprint further south or into London and underlined that Manchester will remain the cornerstone of NorthEdge as it grows.

“Our footprint is the Midlands to the Scottish border – then it is about looking at locations within that.”

In The North West, investments include Direct Healthcare, ITC Luxury Travel, Abbey Logistics, and restaurant and bar operator East Coast Concepts.

The firm typically does three to five deals a year out of Manchester and already has a strong pipeline going into 2017. Meanwhile, Pickering expects to complete two exits in the first quarter.

“We find it breeds momentum to enter the New Year with things to build on and then that positivity drives momentum through the rest of the year,” he said.

NorthEdge, which employs 30 staff, looks at around 200 business opportunities a year – around 60% of that is off market with 40% coming from advisers.

The firm is sector agnostic but anything with contracted or recurring revenue is the “Holy Grail”, according to Pickering.

“We are supportive of acquisitions – we currently have two in exclusivity and one in short order.

“We have never been a house to use leverage to generate returns. It is about structuring it appropriately so the business is robust if a knock does happen,” he said.

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