Gresham House has launched a new limited partnership to enable institutional investors to support growth companies in the UK and Ireland amid growing regulatory pressure for pension funds to invest in unlisted equities.
Gresham House Private Equity Release has successfully raised just under £60m, in excess of its original £50m target, from the Worcestershire Pension Fund and a number of corporate and private investors in the UK and Ireland.
The investment fund will seek to provide secondary capital into established portfolio companies of Gresham House’s Mobeus and Baronsmead venture capital trusts (VCTs), enabling an immediate and “vibrant” pipeline of opportunities into which capital can be swiftly deployed, the firm announced.
It said that the strategy will also have the flexibility to provide secondary, buyout or acquisition capital into new investment opportunities or to co-invest alongside the VCTs into new investment opportunities where there is a requirement for both primary and secondary capital.
Back in July the UK”s chancellor of the exchequer Jeremy Hunt announced plans to unlock up to £75bn of additional investment from defined contribution (DC) and Local Government Pension Schemes (LGPS) to help grow the UK economy and deliver benefits to savers.
In line with the government’s expectations, Gresham House said its investment fund offers institutional investors an opportunity to back companies that have already delivered robust growth for the Mobeus and Baronsmead VCTs, while taking advantage of existing due diligence.
Gresham House explained that the strategy will make investments of between £1m and £10m in 10-15 growing businesses with strong underlying profitability and enterprise values from £10m to £50m.
The fund will also benefit from its existing scale and experience in the venture capital space, the firm said.
The strategy launch builds on Gresham House’s existing offering for institutional investors, which includes funds investing in forestry, real estate, and new energy technologies, it added.
It follows the recent launch of the Gresham House Secure Income Renewable Energy & Storage, which invests in collocated renewable and battery storage projects in the UK.
Elizabeth Ayre, chair of Worcestershire Pension Fund, said that private equity has an important role to play in the fund’s portfolio both as a driver of returns and as a diversifier.
She said: “Gresham House’s longstanding experience investing in growth companies makes this fund a particularly attractive proposition for us, and we are excited to be supporting early-stage businesses across the whole of the UK in a range of exciting sectors, from technology to healthcare, with our investment.”
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