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FPE announces final close on third software & services focussed fund at increased hard cap of £185m

FPE News

12th May 2022

FPE Capital LLP (‘FPE’), the software & services focused lower mid-market growth investor, announces the successful final closing of its third fund (“FPE Fund III” or “the Fund”), with investor commitments of £185 million (US$ 235 million). The Fund hard cap was raised during a compressed fundraising process to accommodate excess demand and the final fund size is a material increase on FPE’s prior Fund II of £101 million.

Established as an independent firm in 2016 on its spin out from a multi-family office, FPE is the only UK lower-mid market growth fund with an exclusive focus on B2B software & software services.

Fund III will continue to build on the firm’s strong track record of being the first institutional investor into founder and entrepreneur led businesses. FPE’s experience helps companies scale through the “second phase” of growth by taking advantage of strong software industry tailwinds and applying a repeatable value creation toolkit, and exiting these businesses to buyers including particularly PE-backed trade acquirers. The team remains committed to the smaller growth investment space and will continue to pursue and assist similar sized businesses to those backed by Fund II.

Leading international investors have chosen to continue to invest in FPE for Fund III, with a 100% institutional re-up rate from Fund II and a group of new investors joining for Fund III. Fund III is comprised of a high quality group of limited partners, including pension funds, insurance companies, endowments and foundations, financial investors and family offices with global representation including UK, the United States, DACH, France and Ireland.

FPE has made 20 investments since 2008 in the software & services space including the first new investment of Fund III - Egress, a cloud and data migration specialist. The portfolio has delivered strong performance to date, with Fund II seeing four exits in 2021 at an average MoC of 3.8x and resulting in an industry leading DPI of 1.1x.

David Barbour, Managing Partner of FPE said:

“This successful raise for Fund III is a validation of our specialist strategy and performance. Our existing investors gave us strong support and momentum on the back of Fund II’s performance and we are delighted to welcome them and a group of highly respected new international investors into Fund III. We are doubling down on our sector and smaller investment size focus in Fund III, exploiting a strong exit demand from mid sized and larger software investors for well invested and developed growth assets.”

Henry Sallitt, Managing Partner of FPE said:

“The strong commitment to FPE’s third fund confirms that our investors believe in our deep sector focus, distinct deal flow in the smaller growth company space and our proven ability to add operational value to those businesses to deliver superior returns.”

FPE was advised by Rede Partners, an independent funding advisor to the private equity industry. Rede also advised FPE on its debut institutional fund, FPE Fund II. Macfarlanes was lead legal counsel in the fundraising. FPE is domiciled in the UK and regulated as an Alternative Investment Fund Manager (AIFM) by the FCA.

For interviews or more information, please contact:

David Barbour, Managing Partner at FPE Capital

+44 (0) 20 3912 8801 | david.barbour@fpecapital.com