31 July 2014
STAR Capital Partners closes a specialist alternative investment partnership - STAR Finance Partnership LP - focused on asset-backed financing for SMEs
The Partnership completes acquisition of Kennet Equipment Leasing Limited, a leading equipment finance broker to UK SMEs
STAR Capital Partners (“STAR”), a leading European fund manager, announces today that it has acquired Kennet Equipment Leasing Limited via STAR Finance Partnership LP (a vehicle established to consolidate the asset finance broker market). Initial funding allocated for this investment is in excess of £100 million. This represents a natural extension to STAR’s long-standing track record of investing in and arranging financing for asset-based businesses.
Kennet Equipment Leasing Limited (“Kennet”) is one of the leading equipment finance brokers to small and medium-sized enterprises (“SMEs”) in the UK. Kennet has been arranging financing for SMEs for close to 25 years. Since inception, the company has arranged over £500 million in equipment financing for small and medium-sized companies across the UK. The company has a strong reputation for customer service and has been recognised through various industry awards. Kennet arranges financing for all business-essential assets throughout many industries. Individual financings range from £250 to £250,000 per transaction. The company will continue to be run by its experienced management team led by Chairman Steve Swift and Managing Director Tim Tainty.
Commenting on the announcement, Paul Gough, Partner at STAR, said:
"SMEs are a vital part of the UK economy but have been hit hardest by the reduction in lending since the financial crisis as banks repair their balance sheets. We are pleased to have acquired a high quality business that fuels the UK economy by providing financing to SMEs. We intend to invest significant capital to enable Kennet to continue its impressive growth both organically and through additional acquisitions in what is a highly fragmented segment of the financing market."
Tony Mallin, CEO of STAR, said:
"Asset-backed financing and leasing is probably the most suitable form of financing for small and medium-sized companies. We look forward to working in partnership with Kennet’s management team and employees 2 who have created an excellent business arranging financing for UK SMEs since 1991."
Steve Swift, Chairman of Kennet,said:
“I have built a strong working relationship with STAR over the last few months and I am looking forward to working with their investment team to continue the Kennet success story and serve our existing and new customers."
Today’s announcement provides another example of STAR’s strategy to acquire attractive platforms for future growth in partnership with existing management. It follows the recent acquisition of Twinwoods Heat and Power in April 2014, through its portfolio company European Generation Limited, a vehicle established to invest in small scale renewables projects in the UK.
The acquisition of Kennet is the sixth UK investment completed by funds managed by STAR, following its investments in Inexus, SMIF, Oxford Aviation Academy, Twinwoods Heat and Power, and Eversholt Rail Group.
With its second fund now fully invested, STAR intends to begin fundraising for its third fund in the fourth quarter of 2014.