TDC aiming to hit £3billion benchmark with KKR backing

A Manchester-based lender has pulled off a major coup by securing new capital investment from American private equity giant KKR.

KKR is also taking a stake in TDC which the firm says is “a new capital partnership.”

Founded in Manchester as Tosca Debt Capital in 2015 by partners Gary Davison and Richard Williams, Davison said the fund’s “sweet spot” is “lower mid-market companies” across the UK, often with a private equity fund as “sponsor” or major investor in a business.

Davison told “We’re looking for well performing companies with good data, strong management teams and in the sectors we’re comfortable in.”

He said a good example of the kind of deal TDC likes is the investment he did alongside NorthEdge in Catalis, a video games testing business it bought in 2019 for £90m.

TDC also runs a smaller £50m Impact Fund to support job creation and growth in smaller businesses across the North. Davison said: “The Impact Fund is part of our commitment to driving positive outcomes through our investments. It targets SMEs across the North that have been disrupted by Covid-19 and the macro economic conditions experienced following this period, to support their recovery with a specific focus on growing employment in the local region.”

As part of the investment in TDC, Anirban Ghosh and Ian Anderson of KKR will join TDC’s strategic board, along with new chairman Alan Burke, former co-head of KKR’s credit business.

The new arrangement will also see Toscafund Asset Management exit as an investor and partner in TDC, having been involved as a cornerstone investor in TDC’s funds since the firm’s inception. To reflect this change, the firm will now rebrand to TDC.

Davison added: “This is a landmark moment in the development of TDC. We are delighted to be collaborating with an organisation of KKR’s standing, and the resources, network and strategic input they will provide will be of huge benefit as we look to accelerate the growth of TDC in the years to come. While economic conditions are challenging and debt availability is tightening, we are still seeing a strong flow of private equity deals. We believe the new investment will place us in a great position to gain market share and show we are a committed funding partner for ambitious companies and private equity sponsors operating in the lower mid-market.”

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