Exclusive: Endless lining up £400m fund

The Yorkshire-based investor, which specialises in turnarounds, is understood to be aiming to raise £400m, double the size of the last round of fundraising.

Led by managing partner Garry Wilson, Endless will start speaking to potential backers in the United States, Europe and China later this year.

These include American universities, pension funds and high-net worth families in Europe and investors in China.

Mr Wilson told The Yorkshire Post: “Many of our portfolio companies have interaction with the Chinese economy.

“We have sourced a lot of goods from China; the role that China plays is becoming increasingly important in terms of the UK economy; it is very important for us to have a partner over there.”

The fund will be the fourth for Endless, which launched a £135m fund in 2005 with backing from David Newett, the low-profile Yorkshire property investor.

The private equity house followed up with a second fund of £164m in 2008 and a third fund of £220m in 2011, which was oversubscribed.

Both were supported by investors from the United States and Europe.

Endless is in the final phase of investing fund three and has completed six deals since July.

Deals include management buyouts at flooring accessory manufacturer Gradus and retailer The Book People and the takeover of business supplies firm Office2office plc.

If successful with its £400m target for fund four, Endless will have raised nearly £920m to invest in UK businesses, many of which are based in the North of England.

“It will definitely get us to the upper end of the mid market,” said Mr Wilson, who emphasised that the firm would continue to operate with the same approach.

Enless tends to invest in the acquisition of non-core businesses, turnarounds, financial restructurings and challenging management buyouts. It has made around 40 investments to date and has around 20 companies in its portfolio.

“Their prospects of a successful fundraising are very good indeed,” said Martin Jenkins, one of the region’s best-known dealmakers and head of Deloitte in Yorkshire and the North East.

“One of the distinguishing characteristics of Endless is they understand deeply what they are good at and investors like that.

“It is a UK fund but its senior people and headquarters are based in Yorkshire. It is a fantastic success story for Yorkshire and it has not even had its 10th anniversary.”

A number of private equity houses have a presence in the region, notably LDC and NorthEdge, as does the Business Growth Fund, which is backed by Britain’s main high street banks.

The British Private Equity & Venture Capital Association last week announced that it was appointing a director to promote the role of private equity and venture capital in the North of England and enhance the BVCA’s engagement with members, a significant minority of whom are based outside of London.

While most UK private equity firms are headquartered in the capital, the clear majority of portfolio companies are based in the regions.

Mr Jenkins said: “I don’t think there is an issue with access to private equity in Yorkshire but I would like there to be more houses concentrated on generating and executing transactions in this region because I think it is rich with opportunity.”

He added that the industry could do more to increase the understanding of the contribution that private equity makes to the wider economy.

Politicians have levelled allegations against the industry including predatory asset-stripping, greed and loading companies with debt to pay out enormous dividends.

But defenders point to the role that private equity plays in creating access to capital for SMEs that are unable to tap public markets.

Today, private equity-owned businesses employ as many people in Britain as the NHS.

Andersen collapse was catalyst for turnaround fund

The collapse of Arthur Andersen following the Enron scandal was traumatic for many of its employees.

But the corporate bombshell was the catalyst for Garry Wilson and Darren Forshaw to set up Endless LLP.

They decided to take control of their destiny and persuded David Newett, a self-taught Yorkshire property entrepreneur, to back their idea for a turnaround fund when everyone else in the private equity industry was doing big deals loaded with debt based on the assumption that double digit growth would go on and on.

That was nine years ago. Today, Endless is on the verge of launching its fourth fund, bringing the total raised to nearly £1bn.