London-based private equity firm Lyceum Capital is readying to raise its fourth fund, City A.M. has learned.
The firm, which owns a stake in cafe chain Eat, is hoping to rake in between £375m and £400m from its institutional investors.
Although this will be slightly bigger than Lyceum’s previous £330m fund, it is not as much of a step up as some of its peers have taken in recent fundraisings. Several have doubled the size of their previous fund, taking advantage of cash-rich investors.
“We are aiming very pointedly to stick to our strategy of buying typically from founders,” said partner Andrew Aylwin, noting that the firm’s faith in smaller UK companies remains strong.
The extra capital, he added would be used to scale up the businesses to a slightly larger size.
Although Aylwin was not a Brexit advocate, he believes the UK mid-market is still a positive place to be operating in post-EU referendum.
“A lot of our businesses make acquisitions overseas, so we have to think about foreign exchange risk and how weak or strong sterling is,” he said.
“There is concern, as Britain is a small island economy and we’re putting ourselves through a remarkably challenging next two years. But the UK is made up of very determined, focused entrepreneurial people who aren’t minded to sit back and take what comes.”
Lyceum has sold seven of the nine investments from its second fund, and its third fund is almost fully invested.