Before we look at 2024, its worth reflecting on 2023, a year that had its challenges! Geo-political tensions, conflicts, inflation and higher interest rates all played a part in the lower volume of M&A deals in 2023. But that masks some great news stories. SME businesses in our three sectors of technology, tech-enables business services and financial services continued to grow and adapt to the environment. We saw strong growth across our portfolio of businesses with revenue growth over the past 12 months to December 2023 of 25%.

Indeed, 2023 was a strong year. We deployed £60 million into 4 new platform deals, demonstrating that entrepreneurial management teams are finding ways to drive their businesses’ forward in turbulent times. We also completed several acquisitions for our portfolio companies. We invested in:

·      Obsequio, a leading fire and water safety compliance platform (we have subsequently acquired 3 businesses since our investment into this company),

·      Arc Systems, a leading IT Managed Services business (we have subsequently completed its first bolt-on acquisition)

·      LearnLight, an ed-tech platform operating across the globe in language training and

·      Covertswarm, a disruptive cyber-security platform that identifies vulnerabilities in an organisation’s’ cyber posture, in a world where cyber attacks are rapidly increasing.

So what does 2024 hold and are there reasons for optimism?

Paul Franks commented: “2024 will, we hope, provide a better backdrop to the overall deal-making environment. More certainty around interest rates, lower inflation and technology advancement in generative AI will, we feel, provide a foundation for higher deal volumes this year. We have a great pipeline of new deals and expect to announce both new platform investments in the next few months and further bolt-on acquisitions as we build-out our investments with further capabilities and scale.

We will continue to back entrepreneurial leadership teams in high growth, exciting parts of the UK economy to build category-leading businesses – we go into 2024 with an expectation we will invest a record amount of capital and provide top-decile returns for our investors and management teams. We very much look forward to the year ahead”.

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