Structured Finance

What is Late-Stage Structured Finance

Late-stage structured finance is the provision of capital for pre-realisation event financings:

  • Purposes – accelerate growth, acquisition finance, shareholder liquidity, or balance sheet optimisation;
  • Instruments – investments may be in the form of debt with warrants, convertible loans, direct equity or a combination thereof;
  • Our expectations – typically, investments are structured to provide current yield with equity upside;
  • Term – exit events should be within 36 months

Our focus is on mid-market companies (enterprise value <£100 million) in Europe:

  • Funding aimed at companies whose development has progressed beyond VC/private funding but before senior debt availability
  • Investment size – £5 million to £15 million
  • If appropriate, larger deal sizes may be financed through co-investment arrangements
  • Our sector focus – media, proven technology, and services

Transactions

The investments made by the Fund will be primarily in Western Europe companies; additionally, North America businesses that are looking to list in Europe may be considered. The sector focus is on media, proven technology and services where the Principals have extensive experience.

The Fund looks to invest in companies with the following essential characteristics :

  • Experienced management team
  • Realisation event within 36 months – this needs to be committed to by the management and also be a realistic possibility
  • Strong prospective cash flows/growth prospects
  • Revenue/earnings sufficient to cover interest
  • Leadership in market niche
  • Security coverage if no realisation event
  • Deal size €5 to 15 million

The investment may comprise of a combination of equity and debt instruments including subordinated loan notes, with detachable warrants, exercisable post realisation event. The debt is repayable at the end of the term, or on occurrence of the realisation event.

The investment appraisal process is subject to a rigorous but focused due diligence, but we aim to complete the whole process quickly.

Investment may be required for:

  • Ramping growth in the business through:
  • New markets/products
  • Sales force expansion
  • Marketing;
  • Consolidating/ realigning shareholder interests to facilitate a realisation event
  • Strengthening balance sheet/optimising capital structure; or strategic acquisition