Deutsche banker launches distressed retail fund

In a potential sign of things to come, Henry Jackson, a senior banker at Deutsche Bank, is leaving to set up a private equity fund specialising in distressed investments in the European retail sector.

Mercapita Partners will focus on turning round financially troubled retailing businesses in the UK and Continental Europe. Jackson is discussing anchor funding in Mercapita’s first fund with two investment banks, one American and the other European.

The investment thesis is backed up by figures released by the UK’s Office of National Statistics, which showed that retail sales fell by 1.3%, lower than the same period last year, itself a first since records began in 1945. The retail gloom impacted the whole sector with food stores down 0.5% and non-food down 1.9%. The outlook also looks bleak, with muted wage inflation, rising unemployment and spiralling debt levels. For the first time, consumer debt is higher than annual economic output in the UK.

Jackson, who is a senior managing director at Deutsche Bank and head of its European consumer and retail group, said the timing was good for such a fund. Jackson has spent 20 years as an investment banker advising on buyouts, mergers and acquisitions and financing for retail businesses. Recent transactions have included the initial public offering of Gondola Holdings (parent company of PizzaExpress and Ask Pizza) and the sale of Kwik Fit.