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Livingbridge finds new manager in Gresham House for Baronsmead and Equity Funds

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Livingbridge, the mid-market private equity firm, today announces that it has reached an agreement to sell the fund and investment management business of Livingbridge VC LLP, comprising the Baronsmead VCTs and the Livingbridge Equity Funds, to Gresham House plc (“Gresham House”), a specialist alternative asset manager listed on the London Stock Exchange, for up to £40 million.

Livingbridge VC LLP is part of the broader Livingbridge group and a UK investment manager with over £0.5 billion of assets under management, managing two VCTs investing in unquoted and quoted companies and two dedicated OEICs primarily investing in UK quoted companies.

Launched in 1995, the Baronsmead VCT brand was one of the very first VCTs and is known for its consistent performance and governance within its sector. The Equity Funds business encompasses the highly respected LF Livingbridge UK Micro Cap Fund and LF Livingbridge UK Multi Cap Income Fund.

All four funds have performed strongly in their relative markets since their respective launch dates and have a demonstrable track record of delivery.

In Gresham House, Livingbridge and the fund management teams are confident they have found a partner that recognises the potential for both businesses and will continue to prioritise performance for shareholders whilst continuing to support high growth entrepreneurial UK businesses. Most importantly, the sale enables these two complementary businesses to remain in common ownership as they share significant team expertise and insight into the market.

The transaction will see Gresham House commit to a deferred payment of up to £10m, contingent upon a number of factors and Livingbridge will also receive £7m in shares in Gresham House as part of the transaction which supports the intention for a long-term relationship.

The transition plans between Livingbridge and Gresham House are already underway with formal agreements covering support services between the two businesses in place. Both firms have committed to a wide-ranging, multi-year transitional support agreement to pass on ideas, best practice and networks and it is envisaged that key Partners at Livingbridge who work with the two businesses will also continue as consultants to Gresham House for up to three years in order to provide continuity and deliver a smooth transition.

All 16 employees, comprising eight specialist investment professionals alongside eight dedicated distribution, financial and operational staff, employed within Livingbridge’s head office in Wood Street, London will transition to Gresham House’s offices in nearby Cheapside. Existing investments across both the VCTs and Equity Funds will remain unaffected by the transaction given the continuity of investment management relationships.

Following the transaction, Livingbridge will be able to focus all its resources on the continued expansion of its core private equity business.

Since its creation in 1995, Livingbridge has backed over 125 companies, investing in fast-growing companies valued up to £200m. The business consists of over 75 people in the UK and Australia, alongside a recently opened office in Boston to assist portfolio companies expanding into North America.

Gresham House is a specialist alternative asset manager providing funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies. The Group’s expertise includes strategic public and private equity, forestry, renewable energy, housing and infrastructure.

 

Wol Kolade, Managing Partner at Livingbridge said:


“Baronsmead was one of the very first VCTs to be established back in 1995 and has built a strong reputation for quality and consistent performance, supplemented by the 2009 creation of the quoted Equity Funds business.

“We are immensely proud of all that we have achieved across both businesses but, as our core PE business is the central focus of our future growth plans, we have taken this decision because we know Gresham House will be an outstanding guardian of these funds and will invest in their growth for the benefit of shareholders for many years to come.

“We would not be taking this step if we hadn’t found Gresham House to be a high-quality and ambitious group, focused on performance and governance in the same way we are, and I look forward to working with Anthony Dalwood and his team to deliver a smooth transition and build a longer-term relationship.”

Anthony Dalwood, CEO of Gresham House, said:


“The fund management businesses’ investment philosophy across public and private equity companies has generated strong outperformance and has clear financial and strategic benefits for long-term Gresham House shareholder value. The capable team will add to our existing high-quality investment and client personnel, enabling additional growth opportunities for the Group.

“The acquisition will be immediately earnings enhancing, taking the Group’s AUM past £2 billion, increasing our scale and relevance to investors and creating additional shareholder value. We’re very much looking forward to welcoming the Livingbridge VC team to Gresham House with whom we have a close cultural fit.”


Video:

Wol Kolade talks about the rationale behind the transaction and details around the transition process.