Risk Capital Partners, the growth capital firm set-up by Channel 4 chairman Luke Johnson, has closed its first institutional fund on £75m.
The London-based outfit has been funded by Johnson and partner Ben Redmond since its 2000 founding, and both have contributed £25m to the new vehicle.
The fund raising took around a year, with the remaining £50m coming from range of blue chip institutional investors from the UK, Europe and the US.
Johnson said: “Owing to the economic downturn, there are many distressed sellers who will be forced to dispose of attractive assets in the coming months and years. This, together with our focus on providing growth capital to entrepreneurs and businesses to allow them to expand, has even more relevance in the current environment as banks are effectively closed for new business. We believe the mix of both of these types of deal presents the potential to generate outstanding returns over the medium term.”
It targets deals in the £10m to £50m range, typically investing between £3m and £10m of equity per transaction.
The fund has already made one acquisition, that of Baker & Spice Ltd, the West London focussed patisserie chain, which was bought by existing portfolio company, Patisserie Holdings.
The firm’s most famous acquisition is Borders UK, which it paid £20m for in September 2007. It also owns restaurant chain Giraffe and women’s fashion retailer East. Johnson is also the brains behind Integrated Dental Holdings, the dental practice chain, which he founded in 1996 and then sold in April 2006 for £100m to LGV, which subsequently sold the group Merrill Lynch Global Private Equity (MLGPE) in a £250m deal last year.