ECI7 first close at GBP117 million

UK-based ECI Ventures has announced the first close of its new fund ECI7 at GBP117 million. The fund’s original target was GBP150 million but due to increased investor appetite ECI has decided to cap the fund at GBP175 million; a final close is scheduled by end October.

The average size of investments in the fund is around GBP6 million, and at final closing it is hoped that there will be a total of 30 investors. The majority of participants in the first round are existing investors who have, on average, doubled their commitments from previous funds. Around 59 per cent of funds raised have come from the UK, 15 per cent from Germany and 13 per cent from the US. According to Janet Brooks, marketing director at ECI, investments will concentrate primarily on the UK, but there will also be a small allowance to invest in companies outside the UK, primarily in Western Europe and the US. She adds that while the new fund will allow ECI to tackle transactions valued at up to GBP40 million, the company is keen to remain at the smaller end of the spectrum.

The new fund will have a broader strategy than the company’s previous funds and it is anticipated that deal size will go up from its average GBP5 million investment to around GBP8 million per investment. Brooks states: “Despite recent press reports, the volume of deals in our core GBP5 million to GBP25 million range remains buoyant and we have seen a reduction in competition as other firms move up in deal size, begin to focus outside the UK or concentrate on earlier stage opportunities”.

ECI6 is now almost 85 per cent invested and is scheduled to reach full investment shortly. Recent deals include the buyouts of Hoseasons, the UK holiday brand; Anix, an IT infrastructure and services provider; Sedgemoor, an operator of children’s homes and educational facilities and Benjy’s, the London-based sandwich shop chain. In addition to its focus on smaller buyouts, ECI concentrates on high earnings growth opportunities with half of the fund’s investments targeting companies with an IT and communication services focus. This strategy will continue to form a major part of ECI7.

ECI specialises in buyouts, buy-ins and development capital deals of up to GBP40 million in value. The company manages venture capital funds with a capital base of GBP280 million. ECI is currently looking to expand its team and will be recruiting two new investment executives in the near future.