YFM Equity Partners has struck a £60m first close for its second institutional capital-backed buyout fund.
The vehicle comes two years after the £45m close of its debut fund in the strategy, with almost three-quarters of the capital in Buy-Out-Fund II coming from existing YFM backers.
Mike White, YFM’s partner responsible for investor relations, said more than £15m had come from new investors.
The firm expects to hold second and final closes for the vehicle before the end of 2019, with the hope of collecting up to £75m.
YFM’s strategy is to raise funds that are invested over two to three years, giving LPs shorter commitment periods and allowing them to reinvest with the firm over smaller cycles.
Buy-Out-Fund II will continue the investment strategy established by the first fund, where typically YFM invests between £3m to £7m into UK businesses where there is a change of ownership and strong growth potential.
White said, “What we have found most interesting is the funds have all been raised from within the UK with all our new investors being individuals, family offices or high net worth investors.
“Most of these investors have generated their wealth as owner managers in the UK small business sector which has given them enormous empathy and a strong understanding of what we do and the businesses we invest in.”
Firm managing partner David Hall added, “We believe the market for these smaller businesses is less well served, which has been demonstrated by the success of our Buy-Out Fund I which is nearly fully deployed just two years after its final close.
“In addition, we realised one of our investments at the end of 2018, delivering a 4.2x return, which shows there is real and tangible value in this market.”
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