Gresham Trust leads £16m backing for debt management group, 1st Credit. Second time funding for entrepreneur Mike Cleary

Gresham Trust, the private equity house, is backing debt management entrepreneur Mike Cleary, aged 45, for the second time in his business career - this time as managing director of 1st Credit, the fast developing consumer debt purchase and collection business which has headquarters in Reigate, Surrey.

The £16m funding package includes an initial commitment from Gresham of £5 million together with banking support from Barclays for 1st Credit and was arranged by Deloitte and Touche. 1st Credit combines traditional debt collection agency work with the purchase of debt. The business will acquire consumer debt from lenders including banks, credit card companies, utilities and retailers, and then collect the debt on its own behalf. In the United States $25bn of consumer debt is now traded annually.

1st Credit estimates that some £3.5bn of debt annually is being handled in a similar way in the UK and that the market will continue to grow.

Cleary and his fellow founder directors, Charles Holland and Najib Nathoo have assembled an experienced management team including Robert Jeens, a senior executive with significant experience in financial services, who has been appointed non-executive chairman.

1st Credit has exceeded its original business plan since it was launched in April 2001 and has already secured a major purchase deal of over £65m consumer credit debts from a leading credit card provider from January 2002.

Christian Bruning of Gresham Trust, says: "Debt collection is predominantly a people business. We backed Mike Cleary five years ago and were keen to repeat our earlier success. At 1st Credit, he has assembled a team of the highest calibre and has a significant opportunity to develop the debt purchase market in the UK where there are few established competitors. The traditional debt collection market is still fragmented and Mike Cleary has a proven track record of delivering service to clients that will underpin 1st Credit's growth."

Ten years ago Mike Cleary was UK customer billings manager with BT, responsible for BT strategy and policy, managing its consumer customer accounts. In 1992 he went into business on his own, helping to found the credit management company CCI. Five years later he led a £4m management buy-out of CCI with the support of Gresham Trust and subsequently sold the business to Equifax.

Non-executive Chairman Robert Jeens, aged 48, brings a wealth of financial and corporate experience to the team. He is currently the chairman of Netsys Technologies and Causeway Technologies and non-executive chairman of The Roxboro Group. Jeens is also a chartered accountant and financial manager with special expertise in risk management and strategic planning. As finance director of Kleinwort Benson he played a leading role in successfully concluding the sale of that business to Dresdner Bank for £1bn. He was group finance director of Woolwich from 1996 to 1999 and deputy chairman of Hepworth from 1999 to 2001.

Najib Nathoo, aged 38, is Finance/Risk director of 1st Credit, having previously had main board responsibility for risk management at GE Capital. At 1st Credit he is working with Cleary assessing and underwriting the purchase of debt portfolios. Director Charles Holland, aged 49, was director of insurance brokers, Johnson Higgins and developed close links with the senior managers of the financial services businesses which 1st Credit targets.

Mike Cleary says: "We see great scope in the market for purchasing overdue debt books from utilities and financial services companies. We are pleased to have the support of Gresham Trust once again. Their involvement will provide great support to our corporate development."

Mike Henebery, Christian Bruning and Paul Canning completed the deal for Gresham Trust and Mike Henebery joins the board of 1st Credit as Gresham's non-executive representative.