LONDON, May 30 (Reuters) - Britain’s Electra Private Equity said it has almost 370 million pounds ($559 million) to spend on new deals after agreeing to sell its biggest investment earlier this month.
In its half-year results released on Thursday Electra said it has 111 million pounds of liquid resources available. Added to this, it expects to net about 257 million pounds from the disposal of animal tagging firm Allflex, which Electra is selling to BC Partners for $1.3 billion.
However, Managing Partner Hugh Mumford said investment opportunities have been relatively scarce recently, with deal flows across the private equity sector running at between a third and a quarter of the volumes traditionally seen.
With firms chasing fewer deals prices had rocketed, leaving Electra “outbid more than you might think at this time in the cycle,” he said.
But he was confident Electra would win more auctions in future because rivals were now raising less money, he added.
The bulk of new opportunities are likely to come from distressed and non-core disposals, Electra said, and it is targeting companies that meet its key investment themes, including an ageing population and the cash-conscious consumer.
During the six months to March 31 Electra said it invested a record 204 million pounds, up from 92 million a year earlier with most of the money used to buy bank-related assets at a discount.
Unlike most other buyout firms which raise money from investors for 10-year funds, mid-market focused Electra invests permanent capital from its balance sheet, freeing it of many of the constraints of having to buy and sell assets within a certain period of time.
As well as selling Allflex, which it owned for 14 years, Electra profited from the listing of motor insurer esure in March.
“For high-quality assets that’s leading to high prices. We’ve been taking advantage of that,” Mumford said.
Electra said its diluted net asset value per share was up 9 percent in the half-year to March 31, while its share price rose 34 percent in the six months to 2,365 pence, compared with the FTSE All-Share’s 15 percent rise.
The shares were up 1.2 percent at 2,283 pence on Thursday.