UK private credit company receives £15m investment from BBB
The British Business Bank, a key player in the UK's economic landscape, has announced a strategic partnership with private credit firm Prefequity. This collaboration aims to provide growth capital to profitable, privately held businesses across the UK, with a particular focus on those without existing private equity backing.
Under this partnership, the British Business Bank has committed £15 million to a separately managed account (SMA) run by Prefequity. This investment will enable Prefequity to scale up its lending and equity participation in businesses across the UK’s nations and regions. The SMA is in addition to the £30 million British Business Bank commitment to Prefequity's Credit Opportunities II LP fund, which targets a final close of £150 million.
Prefequity positions itself as a flexible, debt-based alternative to private equity, targeting companies seeking capital for growth initiatives such as acquisitions, management buyouts (MBOs), and capital investment programs. The firm's investment philosophy combines downside protection from senior secured loans with the opportunity to partner with high-quality management teams through equity participation.
Adam Kelly, managing director and co-head of funds at the British Business Bank, expressed satisfaction with the success of Prefequity's previous fund, stating, "Prefequity's first fund was fully invested, demonstrating the demand for flexible debt solutions in the UK's nations and regions."
Theo Dickens, Prefequity's managing partner, expressed gratitude for the British Business Bank's and other investors' backing of Fund II and the SMA, stating, "We are grateful for the support from the British Business Bank and our investors in Fund II and the SMA. This investment will allow us to make larger investments into well-established, profitable businesses that meet our investment criteria."
The new co-investment vehicle is intended to provide flexible debt solutions to businesses in the UK's nations and regions. Prefequity Credit Opportunities II, the firm's second fund, is making good progress towards its £150 million target. The firm looks forward to attracting more Limited Partners (LPs) in further closings with its investment philosophy.
In summary, the British Business Bank, through its partnership with Prefequity, is implementing a growth capital strategy that leverages private credit to support profitable, privately held businesses, leaving room for management engagement and capital flexibility. This strategy aligns with the British Business Bank’s broader goal of unlocking growth capital for UK SMEs and supporting smaller businesses in reaching their full potential across diverse sectors and regions.
In a separate development, Man Group, a global investment management firm, announced plans to buy US private credit manager Bardin Hill. However, this transaction is not directly related to the partnership between the British Business Bank and Prefequity.
The British Business Bank has committed £15 million to a separately managed account (SMA) run by Prefequity, which will be used to scale up lending and equity participation in businesses across the UK's nations and regions, focusing on profitable, privately held businesses.
This investment complements the £30 million British Business Bank commitment to Prefequity's Credit Opportunities II LP fund, targeting a final close of £150 million, as the firm continues to implement a growth capital strategy that leverages private credit to support UK SMEs.
