Royal London Asset Management has set up a private equity division. Royal London Private Equity’s (RLPE) first offering will be a £200 million private equity fund targeting mid-market investments in the UK and Europe.
Christopher Phillips, who heads Royal London has joined forces with David MacLellan the former managing director of Murray Johnstone to launch the fund. Royal London will commit up to £50 million to the fund which is expected to close within 12 months. RLPE will also manage Royal London’s portfolio of private equity funds and direct investments which have a total value of around £60 million.
Phillips said: “We have been considering for some time how to develop a private equity business and are delighted to be able to work with David MacLellan to develop the joint venture.” He added that Royal London’s commitment of up to £110 million to the venture demonstrates their view that current economic conditions are going to produce some good deals over the next few years which will lead to good returns for investors.
RLPE will operate from offices in London and Glasgow. MacLellan will work from the Glasgow base and there will be one executive based in the London office. The firm plans to recruit a further five executives over the next year.
MacLellan has 17 years of private equity experience. He joined Murray Johnstone’s private equity team in Glasgow in 1984 where he was head of private equity until 1997 when he was appointed deputy managing director and subsequently managing director. He joined the board of Aberdeen Asset Management when it later bought Murray Johnstone, but stepped down in May of this year.
MacLellan first got to know Christopher Phillips and the team at Royal London when the firm was looking to buy Murray Johnstone. He said of the new venture: “Since I left Aberdeen Asset Management at the end of May, I have been seeking a fresh challenge. Private equity is a sector I know and understand well and the challenge of building a new business for RLAM is one to which I am looking forward.”
He added that fundraising would be a challenge in the difficult market conditions. “It is actually a good time to be investing money, but typically a great time for investing is not so good for fundraising,” he said.