Beechbrook Capital, a specialist direct lender, has reached the first close of its second UK SME Credit Fund, with commitments of GBP128 million. The Fund has also made its first two investments, in Hosted Desktop UK and Gravity Global.
Beechbrook’s UK SME Credit II supports small and medium-sized businesses in the UK with a turnover of between GBP10m and GBP100m and EBITDA of GBP1 million and above. It will provide mainly senior secured loans to non-private equity-backed companies to support acquisitions, buy-outs, shareholder re-alignments, refinancings and general expansion plans.
The Fund completed its first investment in Exeter-based Hosted Desktop UK, a provider of cloud services to UK SMEs, to support a shareholder realignment of the business.
The Fund’s second investment is in Gravity Global, a B2B marketing agency based in London, to support its growth strategy.
UK SME Credit II has attracted a broad mix of repeat and new institutional investors. These include British Business Investments, a commercial subsidiary of the British Business Bank, which also invested in SME Credit Fund I.
Beechbrook partner Paul Shea says: “We are delighted with the support we have received from both existing and new investors. There remains an acute shortage of development and expansion finance available in the UK lower mid-market and we will continue to play our part in helping fund growth in this important segment of the market.”
Catherine Lewis La Torre, CEO, British Business Investments, says: “Our participation in Beechbrook Capital’s second UK SME Credit Fund will enable additional capital to be invested in promising UK-based SMEs that require growth capital to scale up successfully. Beechbrook’s approach of providing a combination of debt and equity finance meets our objective of promoting greater diversity in the supply of funding solutions for smaller businesses.”
Beechbrook Capital’s inaugural SME Credit Fund, which raised GBP152m and closed in January 2017, made its 15th and final investment in S:CRAFT, a UK B2B distributor of branded interior plantation shutters, in mid-December. Beechbrook provided a flexible debt and equity solution enabling S:CRAFT’s senior management to take partial ownership of the business through a capital reorganisation.