MacLellan to build private equity business for Royal London

Royal London Asset Management (RLAM), the fund manager owned by the Royal London Mutual Insurance Society, is to raise a £200m private equity fund to invest in the UK and continental Europe.

Royal London, which is run by Christopher Phillips, has joined forces with David MacLellan to launch the fund. It will trade under the name of Royal London Private Equity (RLPE).

MacLellan, the former managing director of Murray Johnstone Private Equity, has 17 years of industry experience. He will invest some of his own money in the partnership.

Having joined Murray Johnstone in 1984, MacLellan took the helm in the 1990s and ultimately led the sale of the firm to Aberdeen Asset Management, the money manager, last year. He sat on Aberdeen’s board until deciding to leave the firm in May 2001.

“My departure was very amicable. I wanted to do something for myself rather than work for a big company, so I went to talk to Royal London”, said MacLellan. “I said to Christopher Phillips: ‘you want to build a private equity business, don’t you? Well, I want to build it for you’.”

Fundraising for RLPE will begin immediately, with Royal London committing £50m up front. The partnership will also manage its parent’s portfolio of private equity and direct investments, with a total value of about £60m.

MacLelland acknowledged that to raise a first time fund is difficult in the current environment, expecting it to take 12 months to close. He is nevertheless optimistic: “My track record is what I’ve done at Murray Johnstone”, he said.

MacLellan added that he wouldn’t take credit for the returns generated while he was running the firm, because people realised that MDs often got less involved in deals than their colleagues. “What I bring is the experience of building the company”, he said. “Private equity is a sector I know and understand well and the challenge of building a new business for RLAM is one to which I’m looking forward.

MacLellan will hire a second executive in the near future and bring in another five recruits over the coming year. RLPE will operate out of Glasgow and London.