Private equity firm launches in the Midlands
NORTHEDGE, the Northern private equity house with £525m funds under management, has taken its first permanent step south and opened a base in the Midlands.
The firm, which uses the tagline “we know businesses in the North because we are one”, has created a small Birmingham team to service the West and East Midlands.
Well-known corporate finance professional Rob Freer will lead the team, and has been joined by investment manager Andrew Skinner.
NorthEdge’s managing partner, Grant Berry, said a Midlands office has “always been a strategic objective for the firm”.
NorthEdge was formed in 2009, looking to service the market within a two-hour drive of Manchester. It opened its Leeds office in 2012 and Mr Freer said the closing of the firm’s £300m Fund II in March made it the right time to create a base outside of the North for the first time.
“It’s less about the North, it’s more about ambitiously-minded, entrepreneurial businesses,” said Mr Freer. “There have been a number of deals done outside of the North – Jigsaw 24 in Nottingham, and DW3 Group in Stoke. NorthEdge has seen the potential in the Midlands market.”
He hopes that his team, and the firm, can help to “re-establish the identity” of Birmingham’s private equity market and to ensure as much of the advisory work, and fees, can stay within the region.
“There has been a lot of leakage out of the Midlands in terms of work,” he said. “The Midlands has suffered a little because some of the PE guys have come and gone.
“One or two have stayed. What we are about is trying to re-establish that identity a little bit.
“It’s easy to build something with value when you are on the ground and the firms are looking for that. It’s harder with a London private equity firm.”
Despite the economic backdrop, Mr Freer is unfazed by the timing of the office opening.
“There’s always something that can make you a glass half-full or half-empty individual,” he said.
“Uncertainty creates opportunity. I’m a glass half-full type of person. When there is uncertainty, the larger corporates narrow their focus and things that were core become non-core.
“We don’t play in auctions – our methodology is going out, meeting businesses, building relationships, so we are in a position to secure a deal off-market or with reduced competition.”
The firm has committed almost £100m of equity across seven deals in the last 12 months.
It typically invests £5m-£45m in deals with an enterprise value of up to £100m to support MBOs, development capital and equity release.
“If the first deals we do are MBOs, then we will probably have found a safe place for our money,” he said. “Probably. It is equity capital at the end of the day.”
