Darwin Private Equity, the UK mid-market firm that spun out from mega fund managers Permira and CVC Capital Partners, has held a second close of its debut fund on £122 million after just three months. It is counting commitments from eight investors including Goldman Sachs, Oxford Investment Partners, Pantheon Ventures and RIT Capital Partners.
RIT Capital Partners, an investment trust listed on the London Stock Exchange, with a market value of approximately £1.6 billion, backed the trio with a cornerstone investment of £50 million in April this year.
Oxford Investment Partners is an independent fund management company owned by five Oxford colleges: St Catherine’s College; Christ Church; Balliol; St John’s College; and New College. It manages assets for those Oxford colleges and a variety of third-party clients.
Jonathan Kaye, a founding partner at Darwin said: “Investors get Darwin. They believe the story especially with the credit crunch and big buyouts slowing. We spent most of our careers in the mid-market.” Increasingly the mid-market is seeing some of the same features of the large caps: auctions, vendor due diligence and aggressive time tables, which Kaye said plays to Darwin's experience.
Kaye said: “Fundraising has been our top priority. We have been focused. We have also recruited, built the infrastructure and opened a new office in Covent Garden.”
Alan Maynard has joined Darwin as a partner. He has held several senior management positions at private equity-backed portfolio companies including Expamet International, Travelodge and Silicon Media Group.
Previously, he worked as an investment executive in Nomura’s principal finance group.
Stephen Delaney is joining Darwin in October as an investment manager from the European consumer and retail team at Citi. Previously, he worked in the UK private equity mid-market while at KPMG corporate finance.
Darwin was founded by Derek Elliott and Kevin Street, both from Permira, and Kaye from CVC.
The firm is targeting £250 million, which it expects to hit by the end of the year. Kaye said: “We have a hard cap of £300 million. Let's see where we get to. We spent a lot of time thinking about strategy and £250 million is the right number. The strategy wouldn't change too much with £300 million, but we are not desperate to hit the hard cap.”
The fund is focused on acquiring controlling positions in UK based businesses with enterprise values of between £10 million and £100 million. Kaye said: “Deal flow is healthy as expected, but we have deliberately not come out with a big bang. We are looking at a number of opportunities.”