Aliter Capital launches industrially focused UK support services fund and closes at £92 million hard cap
First investment completed in Scottish engineering group Edwin James Holdings
Aliter Capital LLP (“Aliter”), today announced that it has launched a fund focussed on investment in the UK support services sector. Aliter Capital I, which has closed at its hard cap of £92 million, was founded in 2016 by a group of seasoned support services entrepreneurs and investors (Billy Allan, Greig Brown, Andy Galloway and Andrew Busby). In addition to closing its fund, Aliter has announced that it has completed its first majority investment in Scottish engineering group, Edwin James Holdings (“EJH”), for an undisclosed sum.
New fund breaks the mould
The founders of Aliter combine a highly unusual blend of industrial experience and investment expertise and have proven experience of successfully building a range of support services businesses over the last 20 years, many of which were private equity backed and all of which have gone on to achieve impressive multiples at exit.
Aliter is one of the first funds of its kind and is focussed on small and mid-sized businesses in the UK support services sector, a market now valued at over £300 billion. Its approach differs from traditional private equity models by making only a limited number of selective portfolio investments in order to deliver dedicated hands-on support.
Making majority equity investments of up to £20 million per company, Aliter will use its deep industrial experience and established network to help its investee companies drive organic and acquisitive growth and take advantage of sector consolidation. Aliter will be based in London and Glasgow and will make investments across the UK.
Aliter is backed by a consortium of US and European institutions including pension funds, insurance companies, universities and foundations. Its founding partners have also made a significant commitment to the fund. The operational and industrial nature of Aliter’s approach to its investments drove significant interest from institutional investors enabling the fund to be raised in under six months. Aliter Capital was advised by Acanthus and O’Melveny & Myers on the fundraising.
First investment – an opportunity to develop a regional business into a national operator
Aliter’s first investment in EJH, an established technical services provider operating across Scotland, represents an opportunity to grow a regional business into a national leader in its field. Aliter has already identified a pipeline of niche bolt-on acquisition opportunities to develop the company’s service lines and expand its blue-chip customer base. Established in 2007 and headquartered in Glasgow, EJH has revenues of £37.5 million and employs 360 staff.
Founders with deep industrial experience and a track record of building successful private equity backed businesses
Billy Allan, Managing Partner of Aliter, has successfully built a number of support services businesses. He joined E.J. Stiell in 1976, assuming the role of CEO in the late nineties. With 3i’s backing, he was instrumental in making Stiell the UK’s leading independent facilities management business, before selling it to Alfred McAlpine in 2002. He then went on to lead Phoenix-backed ASCO Group, building an international logistics support business, before selling it to Doughty Hanson in 2012. At the same time, he was Non-Executive Chairman of H.I.G. backed Europa Support Services, which was sold to trade buyer Bilfinger Berger in 2013. He is currently Chairman of Bowleven plc.
Billy is joined by Greig Brown, former CEO of Europa and Emcor, Andy Galloway, former Commercial Director at Stiell and Europa and private equity professional Andrew Busby, formerly of H.I.G. Capital and Brookfield. Andrew was H.I.G.’s board representative at Europa.
Billy Allan, co-founder and Managing Partner of Aliter, commented: “The UK support services sector is dynamic and continually evolving, driven by increased regulation, its exposure to public and private sector spend and a trend towards service improvement and technology adoption. Each member of the founding team at Aliter has experience of successfully growing support services businesses and we felt the time was right to take that experience and apply it to our own portfolio, creating long- term value for our investors and the management teams that we partner with.
“EJH is a great example of the sort of business that we are looking to back, a privately held technical support services business that has an effective management team in place but that is looking for strategic leadership to drive transformational growth. We see clear potential to support this business and increase its regional footprint and range of services, to create a national, market leading business.”