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Investec Private Bank provides funding to a new fund


The two year loan facility financed management fees, set-up costs and legal fees of Encore 1, Encore Ventures’ first fund, which was established to manage the portfolio acquired in October 2009 from 3i for up to £170 million. Investec’s loan facility was structured to enhance the returns of the Limited Partners (LPs) by ensuring that any capital drawn was used to buy assets rather than cover transaction costs.

DFJ Espirit’s Encore 1 fund is backed by Coller Capital and HarbourVest Partners and includes a significant number of leading European technology and healthcare-centric companies including Icera Semiconductors, Light Blue Optics, ApaTech, The Cloud, CamSemi and Netronoine.

Simon HamiltonPrivate Equity Partner and Fund Finance, Investec Private Bank, said, “We were delighted to be involved in one of the largest and most significant secondary trades of 2009. The flexibility of our funding allowed the LPs to respond to the changes encountered when buying the Encore portfolio and our loan facility significantly improved the cash-on-cash return of the fund.

We continue to see a move by leading GPs and LPs in looking at ways they can maximise their returns by using the fund’s balance sheet. Having a specialist team at Investec enables us to understand and implement these types of structures.”

Brian Robertson, Partner, DFJ Espirit said, “Putting together complex deals in a competitive secondary market often requires innovative thinking and Investec’s knowledge of the market and flexibility allowed us to maximise the returns to investors.”

The Investec Private Equity Fund and Partner Finance team focuses on the financing needs of leading private equity professionals, investors and funds. Investec offers a broad range of financing facilities tailored to the unique requirements of the private equity sector.

Typically, the loan sizes are greater than £3 million and are structured against the private equity investments, management company cash flows or investor commitments.