Beech Tree PE fund reaches first close

Manchester-headquartered private equity firm Beech Tree has reached first close on its second fund.

TheBusinessDesk understands it is looking to raise around £80m in total by the summer.

The firm has also opened its Birmingham office at Colmore Gate, as well as moving its Manchester office to The Colony in Wilmslow, and has also recruited investment director Ben Cartwright from Deloitte.

“We generate opportunities,” said managing partner Paul Franks. “From an advisory point of view, that’s perfect. We are creating deals that would not otherwise exist.”

Franks, the former head of Gresham’s Birmingham office, joined with his Manchester counterpart Andy Marsh to launch the firm just over two years ago.

He said: “We have had a very busy time since setting up Beech Tree in late 2014, our sub-sector focus has really worked and we have now invested in four exciting growth businesses and bolted on three companies already to these investments.

“The ability to tap into local networks as part of this strategy is hugely powerful in identifying and concluding deals.”

Beech Tree typically invests around £40m a year with  investments of between £10m-£30m in companies valued up to £75m that operate in high growth sub-sectors, with digital transformation businesses a current focus.

He said: “The big difference with us is we follow a sub-sector matrix, funding very specific things. It’s not uncommon in London but it is quite unusual for a regional firm to do that.”

Its current portfolio companies include telematics firm RS Connect and unified communications business Wavenet.

“If you look at the businesses we are investing in, they are really, really fast-growth companies,” said Franks.

“RS is a good example – we have more than doubled that business, and nearly doubled the workforce.

“It’s the same with Wavenet. We are scaling that business up now with a couple of acquisitions.”

The recruitment of Cartwright, after eight years with Deloitte in Birmingham, is seen as an important addition to the team.

Franks added: “We want to build up our deal execution capability. Ben gives us more firepower to execute deals and find the right deals to do.”