Palatine raises £254m for fifth buyout fund – biggest yet in toughest market
Regionally focused private equity investor Palatine has successfully raised its largest-ever fund, closing its Buyout Fund V at £254 million.
Palatine co-founder and group managing partner Gary Tipper told theBusinessDesk.com that he was particularly pleased that entrepreneurs who made good returns after being backed by earlier Palatine funds have reinvested their personal wealth into the fifth fund.
“While the vast majority of the fund has come from institutions, the best part of £30m has come from private investors and family offices and a lot of those are people from management teams we backed and have been successful, and then they are giving us their money to invest for them. So that’s another strong endorsement,” he said.
He also said the lower mid-market firm not only beat its own target for the fundraise and achieved a “re-up rate” of well in excess of 100% based on capital raised from existing investors, but found no push back on its commitment to sustainability.
Palatine has been a B Corp since 2022 and attracted a number of new investors across Europe to complement existing investors from the UK, the Nordics and the USA.
Tipper said the whole business firmly believes that private equity investment done the right way is a force for good, and focused on achieving strong, sustainable returns.
“We do it because we think it’s going to make our businesses better and be able to attract better talent, retain that talent, show their customer base that they take it seriously. It’s the right thing to do to run your business the right way. Look after your people, look after your supply chain, look after your customer base. It’s not rocket science,” he said.
The firm’s investment strategy is founded on a strong regional focus from its Manchester head office and is underpinned by three core elements: ESG; backing businesses with a strong M&A strategy and those with scope for operational improvement.
At the Rainmakers conference in 2024 Tipper described the fundraising market as the toughest he’s ever known.
However, today he said that the firm’s largest-ever fund was raised quickly and above target. “This success is a testament to the team’s ability to consistently generate strong returns including the recent exits of Anthesis, NRG Riverside and DTM,” he said.
He added: “It’s very pleasing to see such a strong re-up rate and, after a difficult period post Brexit for fund-raising in Europe, to welcome several new EU-based LPs to our UK-focused fund. As ever we are extremely grateful to our existing investors for their continued support.”
Palatine’s four previous Buyout Funds have invested between £10 million and £50 million into established, profitable and predominantly regional companies in the lower mid-market focused primarily in three core sectors: business services, technology and financial services.
Despite the new fifth fund being their biggest yet, the investment strategy, like the ethos, will remain the same.
Buyout is the most mature of Palatine’s three strategies, which also include the pioneering Impact Fund with Palatine currently investing from its second Impact Fund, and most recently a Growth Credit Fund, a venture debt offering supporting the regional tech funding ecosystem.
Recent investments from Buyout Fund IV include Bluprintx, an internationally focused digital services company and Midlands-based accountancy group BK Plus, which has made 15 acquisitions as part of its buy and build strategy since Palatine invested.
Palatine was supported on the fundraising by the London and New York teams of placement agent Harris Williams with legal advice provided by Fried, Frank, Harris, Shriver & Jacobson (London) LLP.
