The British Business Bank has announced a new commitment of £15 million to a new separately managed account (SMA) managed by Prefequity LLP.

Investing alongside Prefequity Credit Opportunities II LP, to which the British Business Bank has already committed £30m, this new co-investment vehicle will enable Prefequity to make larger investments into well-established, profitable businesses meeting its investment criteria. Prefequity is tarting a £150m final close.

The UK-based private credit firm will target non-sponsored companies – those without backing from a private equity firm – that are seeking capital for growth initiatives such as acquisitions, management buy-outs, and capital investment programmes.

Their investment strategy is particularly suited to owner-managers seeking an alternative to private equity investment to support their strategic growth and development plans.

Prefequity is an established private credit manager, focusing on businesses with strong historic performance and BITDA of £2-10m. Their first fund successfully deployed £100m and has achieved four exits to date.

“Following the success of its previous fund, we are pleased to continue our support for Prefequity,” Adam Kelly, managing director and co-head of funds, British Business Bank, said.

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“This new co-investment vehicle will unlock growth for businesses in the UK’s Nations and regions, providing them with the flexible debt solutions they need to succeed and reach their full potential.”

Theo Dickens, Prefequity’s managing partner, added: “We are delighted our second fund is off to a strong start and immensely grateful to the British Business Bank and our other investors for backing Fund II and the SMA.”

“We look forward to attracting more LPs in further closings with our investment philosophy that combines downside protection from senior secured loans with the opportunity to partner with high-quality management teams through our equity participation.”