WARRINGTON corporate finance firm Dow Schofield Watts has concluded a deal to purchase the remaining debt from former Manchester small firms funding organisation Davenham Group.
Davenham, which had been listed on the Alternative Investment Market, went into adminstration some years ago after being caught out by falling property values.
The directors of Dow Schofield Watts and high net worth individuals raised £5m to support the buyout of Davenham’s remaining debt which will transfer to a new company, Davenham Portfolio Management.
Some former Davenham management have taken a stake in the new entity and will help run the firm, collecting outstanding loans from customers who have yet to repay.
Davenham Portfolio Management will also begin lending to new customers, mainly North West and North of England-based small- to medium-sized enterprises (SMEs), for business assets such as vehicles and machinery.
Dow Schofield Watts director James Dow told the Liverpool Post: “We are in the process of talking to the same investors who bankrolled phase one of the new venture, and potential new investors, about helping to fund phase two, to begin lending to new clients.”
Mr Dow added: “We are delighted to have successfully launched our first debt fund.
“The debt fund further demonstrates our abilities to innovate and create value for clients and moves us closer to being recognised as an independent merchant bank.”
He said: “Due to the current banking environment, the Davenham team were unable to secure the required debt facilities through traditional sources.
“We always recognise opportunity – this is a good management team, coupled with a cash generative, strong asset backed business and we structured a high yielding debt instrument which allowed the management team to retain all the equity.
“The commitments received and the interest from new high net worth investors is testament to the track record we have built within our private equity portfolio and our highly regarded corporate finance advisory business.”