CVC and Permira execs launch Darwin

Derek Elliott, Jonathan Kaye and Kevin Street, three former senior investment executives from CVC and Permira have launched, Darwin, an independent private equity firm focused on the UK’s lower mid-market.

Darwin Private Equity I LP, the group’s first fund has reached its first close with a £50m cornerstone commitment from RIT Capital Partners, a publicly-quoted investment trust, chaired by Lord Jacob Rothschild. He said “RIT has a long and successful track record of identifying and backing talented investment managers. The three partners of Darwin are an experienced private equity team and we are delighted to support them in realising their ambitions.”

Over the coming months, Darwin seeks to raise additional funds from other LPs with a target fund size of £250m. Darwin has appointed Harjinder Hatfield to head the fundraising. Harjinder Hatfield is an experienced fundraising professional and was, most recently, an investment executive at Government of Singapore.

Derek Elliott said: “Darwin is targeting UK buy-outs of up to £150m and we expect our core market to be in the £50m to £100m range.”

Many firms which used to operate in the UK lower mid-market have raised successively larger funds and are now targeting bigger deals. Darwin aims to take advantage of this trend.

“We think there is a space in the lower mid-market for a high quality team to enter,” said Jonathan Kaye. “We have developed our investment approach at two of the leading firms, working alongside some of the most talented people in the industry. Our aim is to bring this expertise to a less sophisticated part of the UK market.”

Darwin is essentially opportunistic in its approach but will focus on sectors in which its partners have prior experience – consumer, industrial products, financial services and TMT.

Collectively the team has worked on a number of well known UK buyouts including: Formula One, Homebase, Inmarsa, Kwik-Fit and Travelodge.

Kevin Street said: “We have extensive experience across a broad range of sectors. If you include our portfolio company work, we have been heavily involved in over 40 separate transactions over the past seven years and the majority of these have been in the UK lower mid-market.”