Close Brothers raises GBP50 million

Close Brothers Growth Capital (CBGC), leading mid-market provider of combined debt and equity funding has announced the closing of a GBP50 million fund for innovative combined debt-equity packages to be invested in UK small and medium sized enterprises (SMEs).

The four prominent investors in the fund are Close Brothers, Bank of Scotland, Prudential M&G and the European Investment Bank. The fund will target deals within the range of GBP2 million and GBP20 million where there is a growing gap in the lower end of the development capital market for SMEs. Key features of the fund include the ability to offer “one stop shop” fundraising on smaller deals combined with flexibility in the funding structures that can be limited by more traditional funding methods.

Three transactions have already been completed and there is an increasing level of interest from advisers and management teams alike who are looking for backers who understands their particular needs.

In July, CBGC financed the GBP7 million buy-in/management buyout of Magnadata International Limited, a leading manufacturer and supplier of air, rail, metro and baggage tickets. The fund has also invested GBP1.5 million in an expanding pub and restaurant company and has a co-ordinated package of GBP12 million in a specialist distributor of electronic products.

Bill Crossan, managing director of CBGC, said the response to the fund has been good and investment activity has been progressing well. He added that with the fund’s current performance, the company could be fundraising again by this time next year.

Crossan recently joined Close Brothers following six years with the Bank of Scotland where he helped develop the bank’s regional network providing structured debt to the UK acquisition finance market.

Close Brothers also recently announced the first closing of Close Brothers AIM VCT PLC “C” Share issue, that launched in September seeking to raise GBP20 million of new money. The fund has raised GBP17.5 million so far. There has been substantial demand for the “C” Share issue, with the initial allocation of GBP12.5 million now fully subscribed and allotted. Further applications for up to GBP7.5 million under the offer are now available although a total of GBP5 million has already been received. The second allocation of shares will be allotted on 5 March 2001.