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Botts high hopes for second fund

Fund management company, Botts is well into fund raising for its second fund, with EURO100 million already committed from lead investors Hermes Investment Management and Bank of Scotland. Botts Capital Partners 2 has a target of EURO325 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 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 headed by director Michael Handrick.”

The fund will be investing between EURO10 million and EURO70 million in equity investments in transactions of up to EURO200 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 GBP250 million of discretionary private equity funds.

BCP 2 is managed by a team of 12 investment executives which include John Botts, Robin Black, Michael Handrick and Andrew Haining. Overall the group has generated a realised IRR of 50 per cent and two and a half times investor capital.