Typical UK search fund investment structure

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by a searcher from INSEAD
in London, UK

4yrs ago

Typical UK search fund investment structure

Seeking guidance on typical investment structures in the UK please. I have seen plenty of content on US but would like to know if/how much this differs in the UK context. Would appreciate a chat ideally or comments on a few questions, specifically:

1. How much tends to be equity vs debt vs seller/other sources
2. The split of redeemable preferred stock to non-redeemable participating preferred stock
3. Common coupon rate on the redeemable portion
4. Typical manager equity in cases of a partnered search
5. Debt interest rates

An example acquisition projection model with UK context will top it off!!

Thank you,
Emmanuel

1 Like

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reply by an admin 4yrs ago
from Stanford University in Honolulu, HI, USA

Hi, ^redacted‌: Please join us for the UK searcher meetup on Friday with search fund attorney Geraint LLoyd. He may be able to shed light on your question as well. Warmly, Karen

reply by a searcher 1yr ago
from North Carolina State University in Pennsylvania, USA

Great questions, Emmanuel. UK search fund structures are broadly similar to the U.S. but tend to involve lower debt ratios (30–50%) and more conservative terms from lenders. Preferred equity (often redeemable with an 8–10% coupon) is common, with manager equity ranging from 20–30% in partnered searches ●‿●