Beechbrook launches Fund III with €200m-plus target

The UK lender is hoping for a first close in Q2 for its latest mezzanine vehicle.

UK-based private debt lender Beechbrook Capital has launched its third mezzanine vehicle and is targeting over €200 million in LP commitments.

The firm is hoping to reach a first close in the second quarter of this year with the final close scheduled for later in 2016.

The new vehicle is the third iteration of Beechbrook’s UK and Northern European-focused mezzanine strategy. The firm extends mezz and unitranche financing to back lower mid-market leveraged buyouts.

PDI reported that the third fund was expected to launch in 2016 last November.

The firm closed its second fund on its €150 million hard-cap in May 2014. That vehicle is more than 80 percent invested and is set to be fully invested by May 2016. Almost 30 percent of the second fund’s capital has now been returned to investors, Beechbrook said. 

Recent deals include a $7.1 million unitranche loan and equity co-investment into FirstCom, a telecoms software business. Beechbrook invested alongside Oakfield Capital, the sponsor supporting FirstCom in an acquisition in Denmark.

“The lower mid-market in Northern Europe remains highly attractive with many quality companies and investment opportunities. Despite increased availability of bank finance we are continuing to find unfulfilled demand for buyout financing. We continue to strengthen the team and look forward to working with new and existing investors to achieve their goals,” said Beechbrook managing partner Paul Shea (pictured).

Beechbrook is currently fundraising for a second strategy which will target lending to non-sponsor backed small to medium-sized enterprises (SMEs) in the UK. The firm reached a first close of more than £100 million ($148 million; €135 million) for the UK SME Credit Fund at the end of 2015.