Foresight acquires Downing’s ventures businesses

Foresight Group, an infrastructure and private equity manager, has acquired the technology ventures division of Downing LLP, including management of the Venture Capital Trust (VCT) and venture Enterprise Investment Scheme (EIS) businesses of Downing.

The funds are Downing ONE VCT Plc, Downing FOUR VCT Plc and the Downing Ventures EIS Scheme. The funds are deployed across venture capital, AIM-quoted investee companies and a small number of legacy asset-backed debt investments. Foresight is expected to acquire the funds for an initial consideration of £13.6m, increasing its private equity assets under management to £1.2bn. Foresight’s VCT net asset value will increase to £542m.

The venture-focused funds, with around 12,000 investors and assets predominantly across the UK as well as in the US and Israel, will diversify Foresight’s existing portfolio, the firm said in a statement. Foresight’s offering will now include earlier-stage venture investments with a thematic focus on enterprise software, deep technology and consumer, complementing the Foresight Williams Technology hard-tech and industrial software focus. The acquisition will also diversify and expand Foresight’s investment reach into the AIM-quoted sector and into the US and Israel.

Key members of the Downing team, some of which currently manage the portfolio, will join Foresight.

Foresight Group was founded in 1984. On the infrastructure side, it manages more than 300 assets with a focus on solar and onshore wind assets, bioenergy and waste, as well as renewable energy enabling projects, energy efficiency management solutions, social and core infrastructure projects and sustainable forestry assets. Its private equity team manages eight regionally focused investment funds across the UK and a SME impact fund supporting Irish SMEs. This team reviews close to 2,500 business plans each year and currently supports more than 130 SMEs.

The VCT management space has undergone consolidation in recent years, with several players divesting their retail venture arms in order to focus purely on institutionally funded private equity and venture capital strategies. Gresham House agreed to acquire Mobeus Equity Partners’ VCT business in September last year; the Mobeus VCT team, comprising partners Trevor Hope and Clive Austin, 14 staff and three consultants, all transferred to Gresham House. Gresham had already acquired the venture business of private equity house LivingBridge (including the Baronsmead VCTs) in a £40m deal.