Specialist direct lender Beechbrook Capital has held a final close of its inaugural UK SME credit fund with commitments in excess of GBP150 million.
The fund has completed two new investments.
Beechbrook Capital UK SME Credit I, which backs small and medium-sized businesses in the UK with a turnover of between GBP10 million and GBP100 million and EBITDA of more than GBP1 million, has attracted investors from across the UK, Continental Europe and North America.
Nick Fenn, Beechbrook managing partner, says: “We are delighted that investors continue to see the attractiveness of high-quality investment opportunities among UK SMEs, where we see a continuing shortage of long-term development and expansion finance.”
The final close was supported by a combination of new and existing investors. British Business Bank Investments has increased its commitment. Its CEO Catherine Lewis La Torre says: “We have supported Beechbrook and its experienced management team for a number of years through our Investment Programme. In line with our aim to support diverse debt finance markets, we are pleased to be participating in the latest round of Beechbrook’s UK SME Credit fund. The new fund’s focus will help address the well-recognised funding gap for loans between GBP3 million and GBP15 million.”
The fund’s most recent investments are unitranche loans to 2Excel Aviation, an innovative business in the aviation sector, and Cloud Direct, a cloud migration and management company, to support the two groups’ respective growth strategies. These are the fifth and sixth investments made by the fund, which is already more than 30 per cent committed.
Founded in 2005 by two ex-RAF pilots, Andy Offer and Chris Norton, and based in Northampton, 2Excel provides solutions to challenging aviation problems. Operating across sectors including defence and security, engineering, agriculture, travel and the oil and gas industry, 2Excel’s customers include the Ministry of Defence and the Home Office along with major airlines and blue chip corporations. It currently manages a fleet of 24 aircraft, 30 long-term contractors and more than 150 staff across eight sites.
Bath-based Cloud Direct, founded by chief executive Brett Raynes in 2003, has helped 4,000 small to midsize businesses switch to cloud computing. Currently employing 100 people, and with recurring revenues around GBP10 million, it has had continuous profit growth and has completed five acquisitions to date.
Meanwhile, Beechbrook Capital is planning to open its first regional office, in Manchester.
Jon Herbert, Beechbrook managing director of the UK SME Credit fund, says: “The Manchester office, which is scheduled to open in the first half of 2017, will increase our ability to meet the strong funding demand from UK SMEs and will facilitate closer relationships with the firms we back and their advisers.”
