Edmund Truell, founder and chairman of Duke Street Capital, will not take part in the firm’s next fundraising. He will focus instead on Duke Street Capital Structured Solutions, a new group targeting opportunities in the pension protection industry.
Truell wrote to inform investors that he would not be involved in Duke Street VI, which is expected on the road next year for a higher target than the previous £850m fundraising.
While Truell has not outlined the extent of his plans, the private equity industry is increasingly sensitive to the issue of pension deficits and legislation. “I could imagine a fund that gathers pension insurance warrants in the same way that a debt fund picks up LBO assets,” said a private equity professional.
Duke Street is well aware that pension liabilities are a potential deal-breaker. It walked away in February from a buyout bid for Uniq, a UK-based supplier of pre-prepared foods to retailers, amid fears over such deficits. Permira’s bid for WH Smith also fell apart last year on account of pension issues.
A source close to Duke Street said that Truell would remain chairman of the investment committee for the foreseeable future. A private equity veteran of 20 years standing, he assumed the role of chairman at Duke Street when the debt side of the business was sold to Babson in 2003. At that time, Peter Taylor took over Truell’s previous role of chief executive.
Duke Street most recently was part of a consortium for the buyout of Cox Insurance in a deal valued at £430m. The consortium, which also included Englefield Capital, was led by Neil Utley, who was chief executive of Cox until June 2004.