BBB invests £15m with UK private credit firm
The British Business Bank (BBB) has made a £15m commitment to a separately managed account (SMA) run by private credit firm Prefequity.
Investing alongside the firm’s second fund, Prefequity Credit Opportunities II – into which the BBB has already invested £30m – the new co-investment vehicle will allow larger investments into well-established, profitable businesses that meet Prefequity’s investment criteria.
Positioning itself as a flexible, debt-based alternative to private equity, Prefequity looks to support owner-managers whose companies demonstrate strong historic performance and an EBITDA of between £2m and £10m.
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It targets companies seeking capital for growth initiatives such as acquisitions, management buyouts (MBOs) and capital investment programmes.
Prefequity Credit Opportunities II is targeting a £150m final close, with the firm saying it is making good progress towards this target.
Its first fund raised £100m and is fully invested, achieving four exits to date.
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“Following the success of its previous fund, we are pleased to continue our support for Prefequity,” said Adam Kelly, managing director and co-head of funds at the British Business Bank.
“This new co-investment vehicle will unlock growth for businesses in the UK’s nations and regions, providing them with the flexible debt solutions they need to succeed and reach their full potential.”
“Our second fund is off to a strong start and [we are] immensely grateful to the British Business Bank and our other investors for backing Fund II and the SMA,” added Theo Dickens, Prefequity’s managing partner.
“We look forward to attracting more LPs in further closings with our investment philosophy that combines downside protection from senior secured loans with the opportunity to partner with high-quality management teams through our equity participation.”
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