Foresight averages 6x return for first two exits from its NW based Regional Investment Fund

Foresight Group (Foresight), a listed infrastructure and specialist regional private equity investment manager, has sold Hedges Direct Group Limited, an ecommerce business in the gardening and landscaping sector based in Euxton, Lancashire. 

This is the second exit from Foresight Regional Investment LP (the Fund), following the successful sale of Clubhouse Golf in March 2020 which generated a return of 6.1x. Following just two strong exits, GBP44.1 million has been returned to the Fund, representing 84 per cent of drawn capital, with 15 portfolio companies remaining. 

The Fund’s success to date exemplifies the strength of Foresight’s regional buyout strategy, which addresses a gap in the market for GBP1 million-GBP10 million equity investments in small and medium-sized growth companies. The Fund specifically targets the North West of England, North Wales and South Yorkshire, a model Foresight has replicated in other regions across the UK. The strategy is delivering both attractive economic returns and broader long‐term benefits for regional communities by applying a professional approach to private equity investment in this underserved part of the market.

Hedges was acquired, following a competitive process, by current Chairman, Steve Caunce, who has backed the management team to continue its impressive growth journey. 

Steve Caunce, Chairman of Hedges Direct Group, says: “I am very excited to have acquired Hedges. The team has built a very solid customer focused platform ready for growth. The potential for the business as a result of this is huge. I very much look forward to supporting Jamie and the wider Hedges team to fulfil this potential.”

Jamie Shipley, Managing Director of Hedges Direct Group, says: “It’s been a pleasure working with Claire and the team at Foresight over the past four years. Together we have strengthened our management team and built solid foundations for growth.”

Claire Alvarez, Director at Foresight, adds: “It’s been fabulous to work with Jamie and the wider team at Hedges, supporting their rapid growth, which has really escalated recently following the investments made into the business. The growth in the ecommerce sector over the past three years has been dramatic and we are delighted that we have been able to support Hedges in its growth journey and in creating new jobs and opportunities in Lancashire. We wish Steve, Jamie and the team every success for the future.” 

Environmental, Social and Governance (ESG) considerations are embedded in Foresight’s investment management approach and support the delivery of strong economic returns across the portfolio. Hedges has made significant progress in this regard since Foresight’s investment. The Group’s products are now environmentally friendly and encourage biodiversity. In addition, Hedges now uses recycled water from a borehole and recycles all paper and cardboard. Overall, staff numbers have increased by 60%, mirroring the Group’s fast growth, and turnover has remained low thanks to high employee engagement. 

Hedges has been a perfect example of Foresight’s approach to value creation through strengthening the senior management team. Foresight introduced Caunce to the business who has been instrumental in driving Hedges’ recent growth. Other changes to the management team included promoting Jamie Shipley to Managing Director, after 11 years at the Group, and more recently Alex How, who joined from N Brown, to lead the growth of the finance function as Finance Director. 

Foresight’s investment supported management in developing the Group’s online presence with improved websites and marketing strategy, greater fulfilment capabilities and new improved office facilities. This allowed Hedges to expand its customer base, targeting both consumer and trade, leading to revenues doubling in four years.

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