London-based lender Beechbrook Capital, which specialises in lending to lower mid-market companies, has held a second close on Beechbrook Mezzanine Fund II at €110 million, the firm said in a statement on Tuesday.
Two new investors have joined the firm’s second fund and three of Beechbrook’s existing investors have increased their commitments.
The initial fundraising target for Fund II has been achieved, Beechbrook said. The fund's hard cap is €150 million. Several further commitments are expected before a final close in late June. At present, the fund has garnered commitments from eight institutional investors.
Beechbrook Mezzanine II has recently completed two new investments. It provided a mezzanine loan to support the buyout of Gusto, an Italian-themed restaurant chain based in the north of England, by Palatine Private Equity and management.
It also issued a mezzanine loan to support the buyout of Americana, owner of the clothing brand Bench, by Emeram Capital Partners. The brand caters for consumers in the 20 to 30 age group, particularly in Germany, Canada and the UK.
It has made five investments from Fund II with another two expected to close in June.
Beechbrook has also expanded by hiring two new associates: David Deregowski, previously of mid-market advisor Lincoln International; and Adam Moore, formerly of alternative lender Ares Capital Management. Further appointments are planned for the second half of the year.
Nick Fenn (pictured), partner at Beechbrook, said in the statement: “The direct lending opportunity in the lower mid-market remains very exciting. We are seeing an increase in enquiries from potential borrowers, due to the continuing dearth of funding available to lower mid-market companies from banks and mainstream institutional lenders. We are also seeing increasing interest from institutional investors looking for exposure to this part of the debt spectrum. We are growing our team accordingly.”
Beechbrook lends to companies with a typical enterprise value of between €10 and €100 million, investing an average of €4 million to €10 million per transaction across a range of SMEs in the UK and Northern Europe. Beechbrook currently has more than €200 million AUM.