Gresham announces interim close of its Gresham III fund at £153m; on target

Gresham, the regionally-based mid-market private equity firm, today announces an interim closing of its Gresham III fund. The fund has raised a total of £153m from 11 investors so far, well on the way to its target of £200m.

Following its spinout from Zurich Financial Services in February 2003, Gresham has focused on building a strong and diverse investor base for the future. The £153m has been committed by pension funds, funds of funds and other institutions in the UK and Europe. Zurich remains a key supporter of the group.

Gresham expects to reach its target of £200m early in 2004. It has experienced strong investor demand for its business model, which offers a clear focus on the UK lower mid-market, regionally-based investment teams, a dedicated portfolio management team and proprietary deal origination.

Gresham invests in lower mid-market management buy-outs with typical deal values ranging from £5 to £75m. The £200m target for the fund reflects Gresham's historical investment focus in the UK lower mid-market, which has fewer competitors than other sectors and offers greater scope for operational and strategic improvements.

Recent deals include the £7m MBI/MBO of the IT support services firm 2escape2, the £20m expansion funding for 1 st Credit, the leading debt purchase and outsourced debt collection agency, and the £25m management buy-out of Altair Filter Technology.

Gresham also has a strong pipeline of investments for the first half of 2004 across its regional network of offices. Gresham specialises in management buy-outs, as well as buy and build opportunities and transactions requiring expansion and replacement capital. It looks for top calibre management with a defined business plan, a defensible market position and strong cashflows.

Paul Marson-Smith, Chief Executive of Gresham, commented: "We are delighted that Gresham III has reached this interim close so quickly, particularly in the current environment, and we are now rapidly approaching our £200m target."