*Altitude Partners introduces its Business Property Relief and Investor Relief qualifying regional private equity fund
Altitude Two, a capital growth focused private equity fund, has been created to benefit investors with investments qualifying for two significant HMRC reliefs: Business Property Relief and Investor Relief. The fund is rapidly approaching its first close target. Overall, the fund is looking to deliver a final close of £20m by the end of the year.
Altitude Two follows the principles of Altitude’s first fund with a geographical focus on the south, and a unique investment model into the equity gap. The professionally managed fund benefits from the rigour and focus provided by an advisory panel that includes Michael Joseph, previously MD of Lloyds Development Capital, and Angela Lane, previously a partner of 3i Plc ensuring thorough pre-investment transaction appraisal and corporate governance.
With a clear strategy on providing a private equity fund for high net worth individuals, the second fund has been developed so investments can qualify for two beneficial reliefs, Business Property Relief (‘BPR’) and Investor Relief (‘IR’). The investments made through this new fund qualify for BPR* after two years and are therefore not subject to Inheritance Tax charges. Equally investments should also qualify for IR upon disposal of the shares resulting in a 10% capital gain rate under current legislation and subject to an investor’s own lifetime personal allowance of £10m.
Formed in 2011 Altitude Partners is a South of England focused private equity business established by Simon White, previously the founding partner of BDO Stoy Hayward Corporate Finance in the South and Jonathan Simm, the former regional head for the south at LDC. More recently, Andrew Syvret joined from Santander Corporate Bank to support fund raising and deal origination.
Simon White, Partner & Co-Founder states, “The main interest from private investors focus on the themes of credibility and investment return. Altitude’s investment approach and the professional track records of its partners support those requirements.
“In structuring Altitude Two we were very aware that we needed to provide an attractive investment proposition for the high net worth investor market that has strong regulation, credibility and performance. The rate of uptake on our recently announced fund is a resounding affirmation that we have achieved this balance.”
“Our investors have confidence in our approach and track record, and also understand our commercial focus on growing businesses in the South of England. Equally I think that the unique nature of a fund that combines the benefits of Business Property Relief and Investor Relief is attractive to those looking to optimise returns.”
Their first fund, Altitude One LP, was developed specifically to support growing businesses in Southern England for buyouts, restructuring and growth opportunities. Investments from this fund included Gradwell, a provider of VoIP and cloud-based services, which has recently been sold for a gross return of 2.7x investment. It also includes James Tobias, a manufacturer of office storage walls and media walls and more recently Moortec, a semiconductor Intellectual Property business which is world leading in Performance Voltage and Temperature Sensing. This fund also supported The Care Division, which was sold in 2015 producing an overall gross return of 2.9x investment.
Jonathan Simm, Partner & Co-founder at Altitude, also comments: “Simon and I have refined and developed our approach over the past seven years. We have, with both funds, raised private equity money that really helps SMEs in the South looking for supportive investment partners. We are in a private equity space few other providers are able to support which, alongside our local knowledge and operational experience, makes Altitude the partner of choice for growth businesses.”
The new fund is open to new investors for a limited period before the final close. It will seek investments of £1m - £4m in development and MBO situations for established South of England-based companies with a minimum £2m turnover, led by ambitious leadership teams. The fund will target a minimum 25% gross IRR return and a minimum 2x net cash return to investors. Fund Two is currently in discussion with five potential transactions in the region.
For more information on Altitude Partners, please contact Jonathan Simm, Simon White or, Andrew Syvret on 023 8000 2030
Notes to editors
- Altitude Partners LLP is authorised and regulated by the Financial Conduct Authority.
- Altitude Partners provides a structure for High Net Worth Investors and family offices who are seeking a managed portfolio approach to direct private equity investment. Altitude, unlike investment clubs, act as an institutional investor delivering structured funding in realistic timescales and working with the companies to build value after the transaction.
- Altitude Partners will invest between £1m and £4million into established growing businesses with ambitious and innovative management teams looking for organic growth, buyout or acquisition support.
- The Partners and Advisory Panel of Altitude Partners have collective private equity investment and portfolio experience in excess of 80 years.
Shares held in unlisted Trading Companies are eligible for Business Property Relief (‘BPR’) when held for two years and BPR relieves 100% of the value in your estate.
Investor Relief is a new relief for share acquisition of unquoted trading companies made after 6th April 2016. This results in investors having a 10% Capital Gains Tax rate on disposal of the shares up to a £10m lifetime personal allowance.
Altitude Two offers the prospect of strong capital growth with low Capital Gains Tax rate outside the Inheritance Tax regime. Both reliefs are applicable with or without each other.
This reflects the correct tax legislation at the date of this press release, which, like all tax legislation is subject to change.