Partner Article

Investor club launches to fund unquoted SMEs

A national investor club has launched, aiming to provide a new source of funding for SMEs.

Chelverton Investor Club aims to facilitate direct investments in unquoted UK SMEs, where equity levels required by firms might be beyond most individuals or personal loans, and too small for most Private Equity providers.

Operators, Chelverton Asset Management, say the Club will only invest in companies with “stable business models” which they trust. Such firms will have a typical value between £0.5m-£5m.

David Horner, founder and managing director, Chelverton Asset Management, said: “We have built our reputation managing funds in the Small Cap space, and are perhaps less well known as an investor in unquoted privately owned SMEs – but we have been active in this market for many years now, and have invested more than £45m for private investors in some 13 unquoted and privately owned SMEs over the past 8 years.

“We have identified many highly competitive investment opportunities in recent times, and have seen the way in which these companies have been overlooked by other private company equity providers.

“At the same time, we are being approached by more and more investors looking for compelling tax-efficient investments, which can offer them good, solid returns – and a more bespoke, personal approach to investing in private companies.

“The Club has been created to fill this gap in the market, and to give members access to a selection of high quality opportunities in the UK Small Companies sector, which we believe in as a firm, and which we have appraised as presenting a lower risk profile to prospective investors. The Club will allow them to create a self-selected private equity portfolio with ease.”

The Club aims to provide a tax-efficient investments in SMEs that might have been overlooked by other private equity providers.

It will invest in cash generative businesses looking to raise development and replacement capital, or those undergoing management buyouts, management buy-ins, or buy-in management buyouts.

Chelverton say investments will be generally in “lower risk” sectors, where the value of the product or service is relatively modest, but the added value element high.

Sectors will include professionals, healthcare, technology and construction.

This was posted in Bdaily's Members' News section by Tom Keighley .