Hotbed, the private equity syndicator, has completed GBP29.6 million worth of investments during the year ending 31 March 2011. The total value of the deals, including borrowing, was GBP43.1 million, an increase of 62% on the total value of investments made by Hotbed last year.
The value of deals made by Hotbed’s investor members was around four times the value of investments made by comparable private investor networks over the same period.
During the year, Hotbed made GBP10.6 million worth of private equity investments across a wide range of sectors, compared to GBP6.3 million the previous year. In addition, Hotbed made GBP19.1 million of property investments, compared to GBP10.8 million the previous year. Highlights of the year included investments in:
No Saints, the new leisure venture by the founder of Luminar nightclubs, operating a portfolio of bar, nightclub, restaurant and live music brands
A NHS Outreach Facility in Northamptonshire, which has been sold for a 65% return on equity (equivalent to 125% IRR)
The Stratford Travelodge Hotel at the London Olympic Park opening in late 2011 and the Sheffield Hilton
Flooring specialists Floors-2-Go, which has been reacquired by its founders
A ground rents portfolio in partnership with leading ground rent management company Eyre & Johnson Group
A SIPP eligible portfolio of properties suitable for corporate lettings in prime central London locations in partnership with specialist fund manager London Central Portfolio Ltd
Since launch, Hotbed has directly placed GBP204 million of equity in 42 companies and 24 properties, and has invested GBP29 million in proprietary and third party funds. Nearly GBP31 million of the total invested was in Enterprise Investment Scheme eligible companies.
Hotbed has made 15 exits; six in private equity and seven in commercial property. Three of the exits were through AIM listings, and the average IRR across all exits was 22.4% per annum.
Russell Pope, Chief Investment Officer of Hotbed, says: “High Net Worths have definitely regained their appetite for alternative investments, especially as they are still able to buy into private equity deals at very attractive multiples.
“The coming months are going to be really exciting, because the recent changes to the EIS scheme have made the case for investing in growth companies even more compelling.”
“Additionally, next year we’ll have a far greater choice in the kinds of investments we make, and will be able to look at bigger companies than in the past.
“We have had already had one very successful exit this year, and we would expect to see more opportunities to crystallise strong returns for investors once the economic situation becomes more settled.”
Andrew Whiteley, Co-head of Property at Hotbed, adds: “The UK property market has had a rocky couple of years but last year there were still attractive opportunities in areas that have held firm such as prime central London properties and ground rents.”
Hotbed has over 900 active investor members, with 94 joining in the last year.
