Kelso closes £100m fund

UK turnaround specialist Kelso Place has raised its third fund from just four investors closing on £100 million.

Kelso Place Asset Management, a private equity firm, has closed its third fund with total commitments of £100 million (€148.6 million; $186.1 million).

The Kelso Place UK Special Situations Fund has been raised from Kelso’s two co-founding principals John Drinkwater and Sion Kearsey and two family offices, all of whom are investors in previous Kelso Place funds.

A placement agent familiar with the fundraising said the two family offices were those of Michael Sherwood, the co-chief executive of Goldman Sachs’ business outside the US, and Jonathan Green, a retired hedge fund manager and ex-Goldman banker. Green co-founded GLG Partners, a hedge fund. 

Drinkwater and Kearsey were also both at Goldman Sachs before Kelso. Kearsey was formerly one of the youngest managing directors of Goldman Sachs, just 29 years old when he was appointed. Drinkwater was an executive director of the US bank.

Kelso’s strategy is to make a small number of long term investments in UK-based businesses, in any sector, where it believes its active approach of working alongside existing management teams can create significant value. Its preferred investment targets are turnarounds, non-core subsidiaries, and development capital opportunities.

While the fund will make individual equity investments in any one transaction of up to £20 million, its investors, together with other external parties, have expressed an appetite and willingness to co-invest larger amounts alongside the Fund.

Drinkwater, managing director of Kelso Place, said:  “Limiting our investor base to a small, select group assists this strategy immensely by ensuring maximum flexibility over how we invest.” 

Current Kelso Place investments include Smythson of Bond Street, a premier stationery and leather goods brand; Marshal, a provider of content security software; Sepura, a network-independent supplier of TETRA terminals; and I2S Group, a provider of data infrastructure and controls solutions for intelligent buildings and data centres.

Most recently, Kelso Place announced an investment in Anya Hindmarch, the luxury designer brand.