Palatine closes Fund II at £150m

Manchester-based Palatine Private Equity has reached the final close of its second fund at its hard cap of £150m, with 55% of commitments from overseas investors.

The firm is now looking to invest between £10m and £25m of equity in regional lower mid-market deals and will continue to focus on “hands-on” partner-led approach.

Fund II consists of £100million from existing investors and £50million from new investors. New investors include GE Pension Trust (US), Nippon Life (Japan), a large German based insurance company and a family office based in London.

The final close of Fund II follows the success of Palatine’s first fund, which closed at £100m in 2007. The firm made nine investments out of the first fund, including the buyout of financial services provider MoneyPlus Group, the secondary buyout of Wealth at Work and the buy-and-build acquisition of boutique hotel chain Hallmark Hotels.

Palatine has successfully realised two investments to date from their first fund. It exited telecommunications provider XLN Telecom in 2010, delivering a 4.5x return to investors, and in 2012 exited Air Energi, a leading provider of technical expertise to the global oil and gas sector, delivering a 3x return in just over three years.

Gary Tipper, managing partner at Palatine Private Equity, said: “We are delighted to announce the final closing of our second fund at the hard cap of £150million. Almost 100% of the investors in our first fundreinvested this time around, which is a clear testament to the performance of the first fund during a difficult time for the industry.

“We are also really pleased to have attracted commitments from several new blue-chip investors which has effectively expanded the geographical reach of our investor base. The new fund will enable us to continue our focus on providing a partner-led approach to deals in the regional lower mid-market.”

Palatine has completed two deals so far from Fund II: the management buyout of Playnation, the UK’s leading supplier of amusement and leisure machines, and the investment into private medical insurance specialist Chase Templeton. Both transactions were completed in February 2013.