May 25, 2017 / 9:15 AM / 6 months ago

Epiris to keep focus on UK assets after Electra split

LONDON (Reuters) - Electra’s (ELTA.L) departing fund manager will pursue an investment strategy which focuses on assets in Britain when it splits from the listed private equity fund next month.

“We have a pipeline of interesting opportunities which pick up where we left off,” Alex Fortescue, Managing Partner of the venture Epiris, formerly named Electra Partners, told Reuters on Thursday.

Fortescue did not mention specific assets, but said that the volatility created by Britain’s decision to leave the European Union, which has created uncertainty for businesses and called into doubt UK-only strategies, could create opportunities.

Despite initial fears that Brexit would deter deal making, merger and acquisition activity has avoided a collapse and with cheap debt and an influx of foreign capital, private equity firms have enjoyed higher exit multiples.

Fortescue declined to comment on fundraising by Epiris, which sources have said has so far raised 500 million pounds for its own fund which was launched in early 2017 with a target of between 800 million pounds and 1 billion pounds.

The splitting of the fund manager from Electra, which owns the British arm of restaurant chain TGI Fridays, was prompted by a long and bitter campaign by activist investor Edward Bramson to join the listed company’s board.

Electra, one of Britain’s oldest private equity firms, reported its net asset value had risen to 5,544 pence per share at the end of March this year, from 5,149 pence, although at a lower rate than the year before.

A research note from JP Morgan (JP.N) said its return made Electra the best performing London-listed private equity company over the last 10 years.

The fund also declared a second special dividend of 914 pence per share when it posted its six month results, during which time it has sold a string of assets.

In recent weeks it has also sold investment property portfolio Pine Unit Trust and Treetops Nurseries.

Epiris will hand over responsibility for managing Electra’s remaining assets, including Britain’s TGI Fridays and Photobox, to the fund next month.

The results of the second phase of Electra’s review will be announced in the fourth quarter of 2017, Neil Johnson, Chairman of Electra Private Equity said.

“We are looking forward to the commencement of the second phase of the strategic review in June, when the executive management team will have direct access to the portfolio companies’ management teams and financial information for the first time,” he added.

Editing by Alexander Smith and Pritha Sarkar

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