Beechbrook, the specialist lower mid-market private debt manager, has announced the first close of its fourth UK SME Credit Fund, UK SME Credit IV LP, with commitments totalling £151 million (including separately managed accounts).
A total of £40 million has been committed to the fund by British Business Investments.
This follows the completion of the final two investments from the predecessor fund, UK SME Credit III, which raised “total commitments of £185 million.”
One is a manufacturer of spectroscopy accessories, which enables clients to develop “high-specification analytical equipment.”
Beechbrook’s investment will now aim to support the company’s growth in Pharmaceutical, advanced materials and Life Sciences sectors.
Our investment is alongside private equity firm Ampersand Capital Partners.
The second is Strata Creative Communications, a firm focused on delivering brand-focused live events.
Based in in London, the company is described as a hybrid virtual and digital brand agency specializing in brand communications and brand experiences.
Working alongside Ethos Partners, Beechbrook’s support will now aim to facilitate Strata’s “organic and in-organic” growth strategy.
These investments demonstrate Beechbrook’s vital position as an alternative lender to SMEs across the United Kingdom, and Strata “marks Beechbrook’s 75th investment in the UK since inception in 2008.”
UK SME Credit IV is targeting a fund size of £250 million and will provide senior secured loans to “businesses with EBITDAs of up to £15 million.”
In line with the predecessor funds in this strategy, the focus will be on non-sponsored companies to support “acquisitions, management buy-outs, refinancings and organic business growth, where there is a scarcity of available capital.”
There are reportedly more than 35,500 firms in the fund’s target market.
Beechbrook maintains a local presence in cities across the UK, including London, Birmingham, Manchester and Leeds, and will continue to widen its network as the strategy develops.
These regional and strategic locations enable Beechbrook to build and maintain connections with borrowers and advisors, enhancing origination and ongoing relationships.
Paul Shea, Managing Partner at Beechbrook Capital said that they are excited to announce the first close of our fourth UK SME Credit Fund and the completion of two new investments.
Shea also noted that they are grateful for the continued support from their investors, which demonstrates the “significant value in investing in the lower mid-market, both from a commercial perspective but also supporting growth, innovation and job creation throughout the UK.”
Richard Smart, Head of UK Investments said that the UK lower mid-market remains underserved when it “comes to the provision of financial capital and bespoke financing solutions.”
Smart added that Beechbrook’s fourth non-sponsored fund builds on the strong performance “delivered in their previous funds and enables us to continue helping UK SMEs grow and achieve their ambitions.”
Adam Kelly, Managing Director at British Business Investments said that they are pleased to continue support for Beechbrook with a commitment to its fourth SME Credit Fund as they work to “increase available capital for smaller businesses and support growth across the UK.”
Kelly also mentioned that British Business Investments has previously backed Beechbrook’s earlier SME Credit funds with “commitments in 2017, 2019 and 2021, and we announced a £20m separately managed account with Beechbrook earlier this year.”
