£50m fund launches aimed at ‘transforming’ Midlands SMEs

A new investor, Inspirit Capital, says it will focus on “acquiring and transforming” SMEs that are “experiencing strategic, operational or financial complexities”.

Inspirit, says has identified opportunities to do this in a variety of sectors including industrials and automotive, and expects to be active in the Midlands given the region’s strong heritage in these areas.

Inspirit Fund I hit its £50m hard cap within a number of months and says it will fill a gap in the UK investment market.

Inspirit’s founders combine 25 years of experience in executing corporate carve-outs and other complex investments. They say they will be looking to expand their team with new appointments in the coming months.

Inspirit says will make control investments in UK-headquartered businesses with revenues greater than £20m and enterprise values of up to £50m, including acquisition finance.

Will Stamp, founding partner at Inspirit Capital said: “We aim to use our capital and expertise to reinvigorate small and medium-sized businesses that are no longer core to a parent company’s strategic objectives or require a different ownership structure and skillset to achieve their full potential. This is potential that may not be immediately obvious – particularly in current market conditions – and as such requires capital, specialist skills and experience to realise.

“We look forward to filling an important gap in the investment market and to transforming businesses in the Midlands and throughout the UK. We expect the Midlands to be a key centre for originating deal flow, particularly in industrials and automotive, and will therefore be highly engaged with the professional and business communities in the region.”

Albert Farrant, founding partner at Inspirit Capital, said: “We are not deterred by market headwinds, balance sheet stress, incomplete management teams or operational challenges – providing we can stabilise the business and create a platform for sustainable growth.

“To address these types of challenges, we are seeking to develop creative and flexible transaction structures, as well as putting measures in place that help management teams to retain their focus on business strategy. We are open-minded on industry sector and have experience of most, meaning we can appraise investment opportunities quickly and provide sellers with high transaction certainty at a time when it is most important for business survival.”

Inspirit was advised on its fundraise by Mishcon de Reya (legal) and KPMG (tax).