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Botts high hopes for second fund

Fund management company, Botts is well into fundraising for its second fund, with €100 million already committed from lead investors Hermes Investment Management and Bank of Scotland. Botts Capital Partners 2 has a target of €325 million and anticipates a first close by the fourth quarter this year and a final close by the first quarter of next year.

Director Robin Black is realistic about fund raising: “We are not pretending it’s the easiest climate at the moment, but with Hermes and Bank of Scotland, we are off to a good start. We have also had a good reception from US investors.” Black expects between 40 per cent and 50 per cent of the fund to come from the US marketplace. Botts is working with Deutsche Bank as placements agents, led by Bryan Kelly.

The fund has also secured commitments from original investors in BCP 1 and Botts management is also committing a substantial amount to the new fund. BCP 2’s focus will be broadly similar to the first fund focusing on mid market transactions in the UK (two thirds) and Germany (one third).

Black sees good opportunities in the German mid-market. “We have always done a lot of deals in Germany. We have an office in Munich with two people on the ground there.” Director Michael Handrick divides his time between the London and the Munich offices.

The fund will be investing between €10 million and €70 million in equity investments in transactions of up to €200 million. “The message we are getting across is that the European mid-market is an attractive area for investments,” said Black.

Last year cornerstone investor Hermes agreed to acquire up to 21 per cent of Botts Holdings Limited (Botts), the parent company of Botts & Company Limited. The investment in Botts has significantly increased Hermes’ capacity and access to deal flow in direct private equity – see private equity news evcj June 2001.

Botts manages money on behalf of US and European institutions and family offices. It has an eleven-year track record of discretionary private equity investing and manages around £250 million of discretionary private equity funds.

BCP 1 has generated an IRR of 50 per cent and over two and half times investor capital.