David Horner, founder of Chelverton Asset Management, launches Macaulay Capital to offer co-investment in private companies


Private Capital Investment and Advisory Company, Macaulay Capital PLC (‘Macaulay Capital’) – a spin-off of the private capital business of Chelverton Asset Management – has launched today on the Aquis Stock Exchange (‘AQSE’). Macaulay Capital combines the benefits of private capital investment with the entrepreneurial drive and flair of incentivised management teams, creating opportunities to co-invest in individual SME private capital deals alongside some of the industry’s most seasoned professionals.

The investment focus

Macaulay Capital has launched its Co-Investment Programme with a focus on tax-efficient and income generating investment, offering an opportunity for high-net-worth individuals, family offices and others to co-invest in a series of diversified investment opportunities. The Company will identify and advise on smaller (sub £10m), niche MBO, MBI, Equity Release and Development opportunities, which are typically income generating [target yield 8%]. These will be steadily growing private companies – companies which are expected to qualify for Business Relief after two years under current tax legislation, thereby creating an IHT exemption – as well as occasional growth capital under the Enterprise Investment Scheme (‘EIS’). Macaulay Capital will invest from its own balance sheet alongside third-party investors in each of the non-EIS qualifying opportunities.

Introducing Macaulay Capital

The Company is the brainchild of David Horner, Founder of Chelverton Asset Management – a specialist investor in sub-FTSE 100 Listed equities, AIM traded companies and SMEs – and will be managed by its two executive directors. Horner, with more than 35 years’ experience in corporate finance, will take on the role of Managing Director, whilst long-time colleague Richard Bucknell, who has led more than 30 investments into SMEs since 1998, takes on the role of Chief Investment Officer. Working together at Chelverton for more than eight years, both have operated in the Small Cap private company market for many years; as such they have extensive experience in identifying, originating, assessing, structuring, and financing transactions, with a string of successful investments in private companies to their name over the period. The team has a track record of achieving average attractive multiples on invested capital of more than 2x, the BVCA citing an appealing 1.8x total return on invested capital as the industry standard for UK private equity deals from 1986–2020*. Horner has long harboured an ambition to launch a firm dedicated to investing in private companies, where he believes there to be many excellent investment opportunities and less competition. The launch coincides with the decision by Chelverton’s Board to wind down its interests in the unlisted space and to focus entirely on its investment funds business. Macaulay Capital has raised £2m at launch. A significant proportion of the funds raised are expected to be utilised for co-investment alongside third party investors.” Macaulay’s approach will differ from the traditional private equity model in that it will not fund acquisitions through excessive debt. Neither will its portfolio of investments be primed for short-term exit strategies. “We are providing an attractive funding solution for portfolio companies”, says Horner. “We invest our own capital and take a seat on the board, and with significant board experience under our belt, we can add value as an investor, our interests with those of both investors and management teams at all times aligned.”

David Horner on the investment opportunity

As an asset class, Private Capital is a proven tool in portfolio diversification, and has produced impressive and consistent returns for more than 20 years – Horner observing many exciting opportunities to invest in profitable and growing businesses, capitalised at between £2m and £10m. “These companies often struggle to attract capital, flying beneath the radar of large private equity houses”, he says. “As such, very few companies offer an opportunity to invest in this area of the market, more so to co-invest, so we are excited to bring Macaulay Capital to market, in the current economic environment.

“We will be looking to identify opportunities to invest in small, well-established, robust businesses, as well as providing occasional opportunities to participate in funding development capital into younger, ambitious, and fast-growing companies – and have already completed our first investment, a management buyout at a South-West based maker of luxury flapjacks.

“We believe significant opportunities can be found amongst this target company set, with the potential to produce significant cash generation and capital repayment, and a robust and steadily growing dividend stream. Wherever possible, opportunities will be structured with a view to optimising the tax advantages available to our investors. We look forward to welcoming investors to our Co-Investment Programme, and to meeting many of them at our events in the weeks ahead.

Those interested in investing with Macaulay Capital should call 0203 946 5980 or email info@macaulaycapital.com.

* Data taken from The British Venture Capital and Private Equity Association (BVCA) report titled ‘Performance and Public Market Equivalent Report 2020’, November 2021.

Neither Macaulay Capital PLC nor Macaulay Management Limited give tax advice. Levels of reliefs will vary according to a person’s tax position and specific taxation advice should be taken by investors to confirm the specific tax losses that are applicable. Macaulay Capital PLC/Macaulay Management Limited accept no liability for any loss or damage resulting directly or indirectly, for any action or lack of action by you in reliance on information and advice or materials published by either entity for general information only. Accessing or acting upon such information, advice or material does not imply any duty of care is being assumed by either entity and is not a replacement for specific personal tax advice from a qualified tax advisor.

Issued and approved by Macaulay Management Limited, a company registered in England and Wales with registration number 13678875, and a wholly owned subsidiary of Macaulay Capital PLC. Registered address: 11 Laura Place, Bath, BA2 4BL.

Macaulay Management Limited is an Appointed Representative of The Fund Incubator Limited, which is authorised and regulated by the Financial Conduct Authority.

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