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LMS Capital Sells Minority Stake in Brockton Capital
Tuesday 13 February 2018

13 February 2018 - UK-based private equity and venture capital firm LMS Capital plc (LSE: LMS) has sold its minority interest in Brockton Capital LLP, the firm said.
In 2006 LMS, together with 3 other cornerstone investors, backed the establishment of Brockton Capital LLP, a private equity real estate investment adviser, and became an investor in Brockton Capital Fund I LP, a real estate investment fund.

The investment in AdviserCo gave LMS the right to participate in entities that would receive a share of any incentive payable in relation to the performance of the Fund and subsequent Brockton-advised funds.
The interests in Brockton LLP and the Carried Interest, are included in LMS' net asset value at cost being GBP 97,000, and are wholly separate from and additional to the company's interest in the Fund.
The majority owners of AdviserCo have agreed terms for a sale of the business, completion of which is conditional on customary conditions including obtaining regulatory approval.

There is a back-stop date to satisfy the conditions of 30 September 2018.

Assuming the conditions are met, the sale will result in the realisation by LMS of its minority investment of 6.67% in AdviserCo but it will retain its existing Carried Interest.
The net proceeds and increase in net asset value for LMS are expected to be in the region of GBP 2.5m (USD 3.47m).
The sale of AdviserCo does not affect the company's investment in the Fund which it continues to hold (net asset value GBP 4.5m at 30 September 2017). Similarly, the company's interests in the Carried Interest on existing Brockton funds are unaffected.
In accordance with the company's valuation methodology and in line with IPEV guidelines, the 31 December 2017 net asset value will be adjusted to reflect the increase resulting from this transaction.
On 24 January 2018, based on information available at that time and subject to further evaluation and completion of the annual audit, the company announced an estimated 31 December 2017 net asset value in the region of GBP 61m (75p per share).
Taking account of the information relating to the conditional sale of AdviserCo, which has arisen subsequent to the 24 January 2018 announcement, the board has adjusted its estimate of net asset value at 31 December 2017 to GBP [63.5]m (78p per share).

This estimate remains subject to further evaluation as well as the completion of the annual audit.
Date Published: 13/02/2018
Target: Brockton Capital/minority stake
Country: UK
Deal Size: 3.47m (USD)
Sector: Banking/Financial Services
Type: Divestment
Financing: Cash
Status: Closed
Vendor: LMS Capital