Alternatives specialist Gresham House, which runs the portfolio of three investment companies, has completed its sale to US private equity firm Searchlight Capital. 

Gresham House is the investment manager of Residential Secure Income (RESI ), Strategic Equity Capital (SEC ) and Gresham House Energy Storage (GRID ).

RESI and SEC issued statements on Wednesday saying they are ‘not currently expecting any change to the relationship between the company and the investment manager’. They also said they had been informed that the Gresham House leadership team and ‘all key individuals’ that currently manage the portfolios remain in place. 

GRID did not issue a statement. 

The deal, worth £470m, was first announced on 17 July. Shares in the firm have now been withdrawn from the AIM market.

Chief executive Tony Dalwood (pictured above) told Citywire that since listing in 2014, the firm’s market cap had grown from £15m to more than £450m.

‘Nine years ago the company was a shell with no direction. But since then, we [have grown] significantly in alternatives and sustainable investments,’ he said.

Dalwood noted the company had made eight acquisitions since its initial public offering and had become progressively more international during that period.

He said the asset manager is now the seventh-largest forestry investor in the world and the largest battery storage investor in Europe.

Gresham House is also the second-largest venture capital trust provider, trailing in size only to Octopus Investments.

The deal brings a return to shareholders since the management buy-in in December 2014 of more than 300%, with an acquisition price amounting to £11.05 per share.

Aims to double AUM

Gresham’s growth is centred around its ‘GH30’ five-year plan, said Dalwood.

The plan targets £20bn in assets under management (AUM) – more than double its current level of £8.5bn.

It also aims to grow the business’s natural capital exposure, specifically by tapping into the US market. In particular, Dalwood said he wants Gresham House to become a top-five forestry investor.

Elsewhere, the chief executive said there would be a greater focus on investing in affordable housing, primarily in the UK.

‘We’re excited about the access to capital and the potential for more [mergers and acquisitions],’ Dalwood said, commenting on the opportunities available with the firm’s new private equity owner.

Dalwood, who will continue his role as CEO, anticipates Searchlight Capital will hold its investment in Gresham House for five to seven years.

He added Searchlight Capital expects the firm to hit its growth targets early.

No LTAF just yet

Dalwood said the firm is looking to expand on its private markets product offering and is especially looking to target the defined contribution pensions market.

He suggested that the long-term asset fund (LTAF) structure may play a part in this expansion but that Gresham House was still looking at options.

The firm may partner with another provider if it were to launch an LTAF rather than doing it alone.

‘Public markets do work’

Although Gresham House is being sold to a private equity firm, Dalwood suggested his business was an example of when public markets ‘do work’.

‘People have turned against public markets in the UK but we’re a good case study of a success story,’ he said.

Despite this, Dalwood acknowledges it is irrefutable that the number of UK publicly listed companies has reduced significantly in recent years.