Beechbrook Capital holds SME Credit fund at £100m

Beechbrook Capital, a specialist direct lender established in 2008, has stopped more new money coming in to its UK SME Credit fund, after raising over £100m to invest in companies turning over betweeen £10m-£100m (€13.5m-€135m).

Investors in the fund include British Business Bank Investments Limited, the wholly owned subsidiary of British Business Bank plc, the UK government’s economic development bank; and the European Investment Fund.

Beechbrook said that it expects to hold a second close in the second quarter of 2016, with the fund targeting a size of some £200m.

The Credit fund aims to provide senior secured loans to non private equity backed businesses, to support acquisitions, buyouts, shareholders ‘re-alignments’ and “general expansion plans”. The investible universe includes some 40,000 UK businesses, which will be targeted with loans averaging £3m-£15m. The first investments are expected to be completed in January.

The fund will be headed by Jon Herbert, managing director, who formerly worked at LDC setting up its debt advisory business, and previously as head of Lloyds Acquisition Finance.

Paul Shea, Beechbrook managing partner, said: “The UK SME Credit fund is a natural evolution for Beechbrook. We are pioneering this type of funding to UK SMEs. We have received numerous requests for it from family and manager owned businesses around the country, which are acutely aware of the shortage of long-term development and expansion finance currently available. Other credit funds in the market generally target larger companies or focus specifically on private equity-backed buy-outs.”

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