Investment Focus & Process

At Connection Capital, we typically invest in management owned and controlled businesses with demonstrable track records of profitability and relatively low levels of debt. In many of our transactions we will be the sole provider of the private equity funding, although we do, from time to time, invest in syndication with other private equity investors known to us.

Investment Criteria

• We focus on investments that require £1m – £7m of equity across a diverse range of sectors
• Management teams must be strong, experienced, committed to the business and have a clear and demonstrable track record of achievement
• All of our investments are in well established, profitable companies with ambition to grow.
• We do not invest in early stage companies.

Transaction Types

• Growth / Development Capital – we provide established, profitable companies with capital to facilitate organic or acquisitive growth
• Management buy-outs – we provide strong management teams with the funding they need to spin out of a corporate or take control of a private company
• Replacement Capital – we provide the funding to acquire all or part of the stake(s) in a private company held by one or more significant shareholder(s).

Investment Structures

We employ the same techniques and investment structures favoured by the leading houses in the private equity industry; techniques that are designed to provide investors with the best possible returns combined with the lowest possible risk.

In many cases the loan notes or preference shares also provide income during the life of the investment. As a result, clients achieve both income and capital growth, thereby enhancing the overall investment return.

Investment Process

In assessing each potential investment opportunity we combine the investment expertise of our team with the invaluable sector specific knowledge and experience of our clients; this is an integral part of our rigorous appraisal process.

Once our Investment Committee has decided to proceed with an investment, and when terms have been agreed with the management team of the prospective investee company, we distribute to all of our clients our “Investment Proposal” or “IP”. The IP is a concise document which describes all aspects of the deal including the investment terms, the financial structure, the potential risks and the targeted returns, including the exit strategy and timescale. Many of our clients will then choose to invest, or not, based on the information and terms presented in the IP. Others will have questions which we are more than happy to answer, either by telephone or in person.

Concurrent to this process we commission appropriate third party commercial, legal and financial due diligence as required. The findings and conclusions of this work, together with any significant changes from the original Investment Proposal, for example, an improvement in the investment terms, are communicated to investing clients prior to legal completion”.

Connection Capital Fees

Our fees are entirely success based. We charge each investee company an arrangement fee at the point of investment completion and an annual monitoring fee. For capital upside, we also participate in the returns made on the equity investment . In this way our interests are aligned with those of our clients. All of our fees are set out clearly in each Investment Proposal.

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