Private Equity’s hunger grows in world of business

Grant Berry

Private equity is increasingly seen as the route for growth for ambitious businesses and investors are showing a growing appetite to get deals done in the North West.

Manchester-based NorthEdge is just one of the private equity houses looking for opportunities in the region.

It has raised £120m to invest in start-up businesses, saying that it has spotted a gap in the market.

The SME fund was raised from existing investors and NorthEdge says it will allow it to broaden its ability to take advantage of attractive investment opportunities in the regional lower mid-market.

It will target businesses across all industry sectors in the North West, investing between £2m-£10m in growth and development capital, management buy-outs, equity release and buy-and-build opportunities.

Managing partner Grant Berry said: “This fund reflects our commitment to backing successful regional businesses and builds on our existing heritage whilst giving us much greater flexibility in terms of the businesses we are able to support.

“There is immense appetite for investment across the North and a plethora of talented management teams that have the potential to achieve their growth ambitions with our support.

“We look forward to capitalising on the new opportunities afforded to us through this Fund and are excited to work with SMEs to generate value for our investors.”

Mid-market private equity investor LDC also has its sights on more activity in the North West after celebrating a record year in the region in 2017.

Earlier this year it revealed that its Manchester office injected more than £75m into five new investments in the previous 12 months, across a diverse range of sectors.

This included backing the management buyouts of Hill Biscuits, scientific communications consultancy Fishawack, software specialist Eque2 and Lakelovers, a leading provider of luxury holiday cottages in the Lake District.

The firm’s Manchester team also supported ChargePoint Technology, a manufacturer of specialist high containment and sterile transfer valves, with a multi-million-pound investment to support future growth.

Over the same period, the team delivered a number of successful exits, including the sale of Mini-Cam, a leading manufacturer and distributor of pipeline inspection systems, to Halma – in a deal that valued the business at up to £85m.

Jonathan Bell, director and head of LDC in the North West, revealed the region remained a key strategic region in LDC’s nationwide pledge to invest £1.2bn of equity over the next three years to support the UK’s small and mid-sized companies.

He added: “The bigger cities of Liverpool and Manchester grab a lot of the headlines, but we’re seeing outstanding businesses doing extraordinary things right across the region.

“Blackburn, Bolton, Warrington, Wigan, Southport, Stockport – there are dozens of hidden gem businesses making a huge contribution to the region’s prosperity.

“Private equity can play an important role in helping to unlock potential and accelerate growth and we’re looking forward to continuing our support of businesses right across the region throughout 2018.”

The firm said the success of its portfolio in the region, made up of14 businesses employing more than 2,800 people and generating £335m in revenues, served as a barometer of the health and wellbeing of the North West economy.