Moulton raises £200 million for second turnaround fund

Jon Moulton is raising a further £200 million to invest in distressed companies with the expectation banks will withdraw support to more businesses next year. 

Jon Moulton is raising a further £200 million to invest in distressed companies with the expectation that banks will withdraw support to more businesses next year.

The AIM-quoted Better Capital Fund II, which will invest in struggling UK and Irish businesses, has already raised £158 million with plans to raise a further £42 million.

Moulton’s turnaround consultancy Better Capital set up its first fund two years ago raising over £200 million investing in businesses such as Reader’s Digest and property group Connaught. Two different cells (2009 and 2012) will separate the assets of Better Capital Fund I and Better Capital Fund II.

With a net asset value of £229.4 million (as of September 2011), Better Capital sees the current economic climate as an attractive one for turnaround investors.

Jon Moulton, chairman of Better Capital, adds: 'With cash readily available, we have been able to invest in turnaround efficiencies whilst quickly saving and returning companies to profitability.

‘We expect banks to increasingly pull back from their support of distressed companies in 2012 which should only increase investment opportunities for Better Capital Fund II.’

Better Capital claims its second fund already has a ‘significant pipeline’ of investments and that the new fund could be fully committed within 24 months. The previous fund (Better Capital Fund I) was 94 per cent committed, in a portfolio of eight companies, as of September 2011.

Richard Crowder, co-chairman, Better Capital, says: ‘We have received strong support from investors for our new shares and about investing in turnaround opportunities. 

‘We see the potential for value generation through the provision of capital, often together with operational expertise to enhance business performance.’