O’Connors advises PHD Equity Partners on Fund 2 launch

PHD Equity Partners (“PHD”) has reached a first closing of £16.5million for its second private equity fund, PHD Equity Partners Fund No.2 (“Fund 2”) and will commence investing it from January 2015.

Fund 2 has a target of £25million and is backed by a diverse group of high net worth individuals, alongside the PHD partners who will be investing over £2million themselves.  PHD will continue to market Fund 2 early in the New Year and given the strong interest, it is expected that the fund will reach its target size by its final close in March 2015.

Fund 2 will build on the firm’s very successful strategy of investing in established smaller UK businesses with the capacity to “scale up”. The investee companies will typically have valuations of less than £10million with PHD providing equity cheques of up to £4million.  PHD’s maiden fund, PHD Equity Partners Fund No.1 LP (“Fund 1”), is on target to deliver strong returns to its investors and completed its final new investment, Modern Rugs, earlier in the month.

PHD invests in businesses operating in a broad range of industries including manufacturing, distribution, and consumer and business products and services.  The PHD investment team has extensive financial and operating experience and works closely with the management teams of its portfolio companies to enhance value.

James Dow, Managing Partner of PHD commented, “We are delighted with the support we have received from investors which we see as recognition of the high quality of our team, the value created within our existing portfolio companies and the strong performance of our past investments. Having now completed our final investment from Fund 1 we are excited about finding new businesses for Fund 2 to help “scale up” in 2015. Our successful fund-raising for Fund 2 is a hugely significant step forward in our ambitions to create a truly unique proposition for investors and investee companies.”

Andy Dodd, Partner of PHD also commented, “There is a large population of attractive SMEs in the UK, with real potential for value creation and a need for strategic investment to facilitate growth.  Over the last six years our team has built an impressive track record, showing real ability to invest and exit investments maximising investor value and we firmly believe the team at PHD can continue this trend.”

PHD Equity Partners LLP is the fund management arm of the Dow Schofield Watts Group. PHD Equity Partners invests in smaller established growing UK businesses with typical enterprise values of up to £10million, providing equity cheques of up to £4million.

Established in 2002 the Dow Schofield Watts Group provides a broad range of professional services, including corporate finance, transaction services, business recovery, management and strategy, VAT advisory, forensic services and equity finance.

David Malone and Mark O’Connor from O’Connors acted for PHD Equity Partners.