Clients of Connection Capital, a specialist private client investment business, have invested in the final close of a North America and Europe-focused lower mid-market private equity fund, run by the highly experienced global team at TriSpan, the New York and London-based private equity manager.
As per Connection Capital’s investment model, its high net worth (HNW) private investor and family office clients were able to participate in the TriSpan Opportunities Fund in units of just GBP25,000 (the usual minimum investment in USD1 million) via a Connection Capital investment vehicle that, in total, substantially exceeded the minimum investment threshold of the TriSpan Opportunities Fund.
The TriSpan Opportunities Fund has a generalist remit, but its current focus is on business services, healthcare and consumer sectors, especially where a ‘buy-and-build’ strategy can be executed. The Fund has already invested around half of its capital into four portfolio companies in these areas, which are all performing well.
With a strong pipeline of high-quality, diversified opportunities under consideration for future capital deployment, the TriSpan team expects the Fund to be fully invested within a short timeframe. Although it mainly targets deals in North America and Europe (the UK in particular), it has no restrictions on including good opportunities from elsewhere in the world.
The Fund is targeting a gross multiple of invested capital of 2.5x and a gross internal rate of return (IRR) of 25 per cent, to be achieved through its flexible strategy which aims to create a mix of deal structures, stages, sectors, geographies and security types, each offering different returns profiles.
Its investment philosophy is to achieve attractive entry valuations and structure with significant downside protection, by investing in companies with strong business models in defensive sectors with comparatively low levels of gearing, and adding value post deal by exploiting growth avenues.
TriSpan’s founders have an extensive track record of successful investing before establishing TriSpan in 2015 with the backing of a number of leading family investment groups.
Connection Capital clients have participated in two previous direct TriSpan investments this year: into the management buyout (MBO) of Rosa’s Thai Café, a rapidly expanding authentic Thai restaurant chain and the MBO of Sk:n, the UK’s largest skincare clinic group.
Lorna Robertson, Head of Funds at Connection Capital, says: “We’re delighted to be involved with TriSpan for the third time this year, to offer our clients even more opportunities to diversify their portfolios with interesting and attractive alternative asset investments.
“Investing in the TriSpan Opportunities Fund gives investors access to a portfolio of high quality private equity assets in diverse geographies, with the added bonus of priority to co-invest directly in specific deals as well if they choose.
“TriSpan has positioned itself right in the ‘sweet spot’ of lower mid-market private equity deals, an attractive niche that larger fund managers tend to overlook. With its flexible, opportunistic strategy and its track record in maximising scope to ‘buy-and-build’ we believe it is excellently placed to deliver value for our clients.”