A GROUP of Scottish entrepreneurs is setting up a private equity firm in Edinburgh to take advantage of the depressed market conditions.
Paul Atkinson, managing director of Edinburgh-based recruitment company Head Resourcing, is among the businessmen behind Par Equity, which will invest in small companies across Europe with the potential for high growth.
Par Equity, which will be h
eadquartered in the city's West End, is also launching a business angel division called Par Syndicate. The angel network will offer smaller sums to start-up or early-stage companies.
Par Equity is currently awaiting approval from the Financial Services Authority before it starts marketing its first fund, Par Innovation Fund I, later this year.
Paul Munn, co-founder and managing director of Par Equity, said: "While our equity fund will offer higher-level investments to firms across the European Union, our angel investment arm is focused on smaller levels of investment for small and medium-sized companies with strong growth potential. We have already had discussions with a number of companies and expect to announce our first investment in early 2009."
Also involved in Par Equity are Malcolm McPherson and Andrew Ley of the law firm HBJ Gately Wareing and Laurie Dempster, managing director of Albannach Financial Management.
The news will provide a boost to the UK's flagging investment market as figures show a deterioration in the value of private equity deals last year. According to the Centre for Management Buy-out Research at Nottingham University, the value of private equity buy-outs in 2008 totalled just £19.1bn, compared with £45.9bn in 2007.
However, according to Linc Scotland, the Scottish business angel association, investments at the lower end of the market are still going strong as cash-rich individuals snap up bargain stakes in fledgling firms.
David Grahame, director of Linc Scotland, says figures out later this month will show 2008 was a bumper year for business angel investment in Scotland. By September, the value of angel deals had topped the £14m invested throughout the whole of 2007.
Commenting on the launch of Par Equity and Par Syndicate, Grahame said: "Angel investment continues to thrive in this challenging economic climate with record levels of business angel activity in Scotland over the course of 2008."
