Gresham goes independent. Zurich supports new role for middle market private equity managers

Gresham, the private equity house, is spinning out of the Zurich Financial Services Group to become an independent private equity management company. Gresham's management is establishing a limited liability partnership to acquire the business. Zurich will remain a key supporter of the independent management group, committing £265m funds under management to the new vehicle.

Gresham chief executive Paul Marson-Smith comments: "The whole team has huge ambition to build on Gresham's well respected record of investing in the middle market sector which forms the backbone of the UK economy. Independence paves the way for us to broaden our financial base by raising additional capital from outside the Zurich group. At the same time, we are delighted to retain the backing and confidence of our former parent."

Sandy Leitch, chief executive of Zurich UKISA, says: "This transaction enables us to continue to benefit from the expertise of Gresham's successful management team in this attractive sector of the private equity market while concentrating on our core business."

Gresham specialises in providing investment capital for middle market companies through deals typically valued at between £5m and £75m. Middle market companies account for nearly a third of UK plc's presence in terms of employment, turnover, goods produced and gross margin.

"Zurich's desire to focus on its core activities coincided perfectly with our ambitions to expand the business and offer our proven expertise more widely," adds Marson-Smith.

"We have a first class team which has produced consistently superior investment returns by focusing on companies with established track records and potential for significant growth. We have completed 45 exits since 1998 worth over £140m - twice the original cost." says Marson- Smith. "Looking ahead, we are optimistic that the resurgence of confidence evident in the middle market sector will generate attractive investment opportunities," he adds.

Gresham became a wholly-owned subsidiary of Zurich Financial Services Group in 1998 following Zurich's acquisition of British American Financial Services group.