UK mid-market buyout firm ECI Partners has closed ECI 8 after just four months at £255m.
This first and final close follows the launch at the end of 2004. The fund was oversubscribed, forcing the firm to scale back its commitments to meet its cap. It is one of the first funds to be raised in the UK in compliance with the Global Investment Performance Standards (GIPS). ECI 8 will continue the investment strategy of its predecessors, investing in UK mid-market buyouts of between £10m and £100m.
Commitments were received from a total of 26 investors/advisors, with 75% of the cash raised by investors in previous ECI funds. LPs from the UK made up half of the investors, with the remaining 50% split evenly between US and European-based investors.
Janet Brooks, ECI’s director in charge of the fund raising, said: “An increasing number of investors are interested in investing with firms operating at the lower end of the mid-market and we could have raised considerably more than £255m, but we took the decision to cap the fund up front because we did not want to be forced into going up in deal size or having too large a portfolio of investments.”
The £175m ECI 7 closed in November 2000, and has made 14 investments, five of which were made in 2004. It has so far made one full exit, January 2005’s divestment of Tragus Holdings Limited, the owner of Cafe Rouge, to L&G Ventures in a £107m deal. ECI 7 made a 5.3x return from the secondary sale, with a 94% IRR. It has also refinanced Think Money Group. The two deals have seen ECI 7 return 50% of its called capital to investors.