Better Capital’s £10m shareholder payback

Michael Bow
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LISTED private equity firm Better Capital, founded by UK venture capitalist Jon Moulton, is expected to pay its first dividend to shareholders early next year after announcing plans for a £10.4m payback from its first investment fund.

The turnaround specialist, which owns fashion retailer Jaeger and publisher Reader’s Digest among others, said it anticipated a distribution to shareholders of 5p a share in the first quarter of 2013 from its first investment fund – which it raised in 2009 – after calling time on the vehicle.

The 2009 fund was the first raised by Better Capital and rounded off its investment period, which expires at the end of December, by helping buy aerospace manufacturer Gardner and buying the debt of UK coal producer ATH Resources for £15m.

Its second fund, which it raised in 2012, is still sitting on around £100m of dry power waiting to be invested having only made two investments since it was raised – £40m to buy Jaegar and £25m for double glazing firm Everest.

Yesterday, management said it was exploring a deal every single day in a bid to draw down on the cash waiting to be put into companies. Moulton and his team have explored 886 deals since the first fund was raised. In an attempt to placate impatient investors, the board said potential deal flow “took time to convert”.

Moulton told City A.M. yesterday: “Most of the offers we get are direct from the companies. We’re looking at several interesting deals at the moment. The shortest we’ve turned a deal around is four working days but on average it takes around ten working days to turn a deal around. Often the firms that come to us are very close to insolvency.”

Moulton founded Better Capital in 2009.