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Beechbrook Capital announces first close on UK SME Credit IV and completes final investments in predecessor fund

Press release 07 November 2024

Beechbrook, the specialist lower mid-market private debt manager, has announced the first close of its fourth UK SME Credit Fund, UK SME Credit IV LP, with commitments totalling £151 million (including separately managed accounts). A total of £40 million has been committed to the fund by British Business Investments.

This follows the completion of the final two investments from the predecessor fund, UK SME Credit III, which raised total commitments of £185 million.

One is a leading manufacturer of spectroscopy accessories, which enables clients to develop high-specification analytical equipment. Beechbrook's investment will support the company's continued growth in Pharmaceutical, advanced materials and Life Sciences sectors. Our investment is alongside private equity firm Ampersand Capital Partners.

The second is Strata Creative Communications (“Strata”), a market leader in delivering brand-focused live events. Headquartered in London, the company is a hybrid virtual and digital brand agency specialising in brand communications and tailor-made brand experiences. Working alongside Ethos Partners, Beechbrook’s support will facilitate Strata’s organic and in-organic growth strategy.

These two investments demonstrate Beechbrook’s leading and vital position as an alternative lender to SMEs across the UK, and Strata marks Beechbrook’s 75th investment in the UK since inception in 2008.

Continuing support for UK SMEs

UK SME Credit IV is targeting a fund size of £250 million and will provide senior secured loans to businesses with EBITDAs of up to £15 million. In line with the predecessor funds in this strategy, the focus will be on non-sponsored companies to support acquisitions, management buy-outs, refinancings and organic business growth, where there is a scarcity of available capital. There are over 35,500 companies in the fund’s target market.

Beechbrook currently maintains a local presence in cities across the UK, including London, Birmingham, Manchester and Leeds, and will continue to widen its network as the strategy develops. These regional and strategic locations enable Beechbrook to build and maintain strong connections with borrowers and advisors, enhancing both origination and ongoing relationships.

We are excited to announce the first close of our fourth UK SME Credit Fund and the completion of two new investments. We are grateful for the continued support from our investors, which demonstrates the significant value in investing in the lower mid-market, both from a commercial perspective but also supporting growth, innovation and job creation throughout the UK. Paul Shea Managing Partner at Beechbrook Capital
The UK lower mid-market remains underserved when it comes to the provision of financial capital and bespoke financing solutions. Beechbrook's fourth non-sponsored fund builds on the strong performance delivered in our previous funds and enables us to continue helping UK SMEs grow and achieve their ambitions. Richard Smart Head of UK Investments
We are pleased to continue support for Beechbrook with a new commitment to its fourth SME Credit Fund as they work to increase available capital for smaller businesses and support growth across the UK. British Business Investments has previously backed Beechbrook’s earlier SME Credit funds with commitments in 2017, 2019 and 2021, and we announced a £20m separately managed account with Beechbrook earlier this year. By backing independent finance providers like Beechbrook we help diversify the UK’s smaller business finance market, providing more choice for businesses. Adam Kelly Managing Director at British Business Investments

Further Information

Notes to editors

About Beechbrook Capital LLP

Beechbrook Capital, a specialist direct lender founded in 2008, invests in the lower-mid market/SMEs across a range of industries in the UK and Europe through two separate debt strategies. To date, it has raised more than €1.3bn and has invested in 104 companies.

Beechbrook’s UK SME Credit funds provide senior finance to support non-sponsored companies with EBITDAs up to £15 million across the UK. Additionally, Beechbrook has a separate European SME fund strategy focused primarily on sponsored companies. The Beechbrook team includes more than 15 investment professionals located in six offices across the UK and Europe. Beechbrook was advised by Macfarlanes.

For additional information, please visit Beechbrook Capital’s website at www.beechbrookcapital.com.

About British Business Investments

British Business Investments Limited is a wholly owned commercial subsidiary of British Business Bank plc the UK government’s economic development bank. British Business Investments aims to improve access to alternative finance for smaller businesses across the whole of the UK, while supporting the UK’s transition to a net zero economy and generating a return for the UK taxpayer. Find out more at bbinv.co.uk.

British Business Investments Limited is registered in England and Wales with company number 09091930, and registered office at Steel City House, West Street, Sheffield, S1 2GQ. British Business Bank plc is owned by HM Government and is registered in England and Wales with company number 08616013, and registered office at Steel City House, West Street, Sheffield, S1 2GQ.

British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found on the British Business Bank plc website.

The transaction described above does not constitute or imply any endorsement, warranty or recommendation by the UK government, British Business Bank plc or its subsidiaries or any other party in respect of Beechbrook Capital LLP or its products or services.

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