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First success for IRRfc

A secondary buyout of Ward Homes, arranged by The Royal Bank of Scotland’s Debt Ventures team, has provided IRRfc with its first partial exit from a Phildrew Ventures investment since regaining its independence.

Ward Homes was a GBP50 million public-to-private investment made in July 2000 from Phildrew Ventures Fifth Fund, then part of UBS Capital. The IRRfc team originally formed Phildrew Ventures, which was acquired by UBS in 1998, and then bought itself out earlier this year. IRRfc now advises portfolios of direct private equity investments and is responsible for securing exits for investments made by the Phildrew Ventures Third, Fourth and Fifth Funds, which have a total value of just over GBP300 million.

The fund advised by IRRfc has reduced its stake in the company to about 20 per cent from around two-thirds but retains a board position, held by Frank Neale. Ward’s management is now the majority shareholder, although Royal Bank of Scotland has taken some equity. Robert Jenkins, a partner at IRRfc, said: “We’ve already got more out than we put in, about double the cost plus 20 per cent.” The overall IRR to the fund was 36 per cent.

Ward Homes is a regional UK house-builder focused on Kent and the North Thames area, it was established in 1935 and floated on the London Stock Exchange in 1972. Royal Bank of Scotland has underwritten a senior debt and mezzanine package, including land acquisition facilities, in Ward’s GBP67 million secondary buyout. Royal Bank of Scotland also supported CEO David Holliday in the company’s first buyout. “Ward Homes continues to operate successfully in its niche marketplace. We’re not desperately keen for an exit but RBS came to us with this proposal and we were happy to accept,” said Jenkins.

IRRfc is currently looking for other portfolios to advise. “It’s only three months since we became independent, there are a number of portfolios we are looking at but it doesn’t happen overnight. It could be another couple of months until we announce our second portfolio,” says Jenkins.