Private equity firm to look for opportunities in turmoil

A private equity firm due to be launched in Edinburgh by a group of Scottish entrepreneurs has plans to recruit in 2009.

Par Equity is currently awaiting approval from the Financial Services Authority. Assuming this is forthcoming, it plans to invest in start-up and high growth companies in "innovation" industries, which will inevitably involve a lot of technology firms.

It will also be launching a business angel division called Par Syndicate.

It's likely to start building its investment team in the second quarter of this year, says Paul Munn, co-founder and managing director.

"Once we get FSA approval, we'll find out how buoyant the market is in terms of fundraising," he says. "On the back of that we'd be looking to expand the team with research analysts, support functions and an investment manager role."

He says that Edinburgh offers a lot of financial services talent, but it makes sense to expand the search internationally in order to secure the best people.

It might seem brave to be launching a new private equity firm in the midst of a global financial crisis, but Munn is optimistic about the opportunities that are out there.

"Perversely, it may be an interesting time to be doing business," he says. "Traditional sources of funding such as leverage from banks and other investment houses have actually been pulled back, so companies are being starved of the investment they need."

What's more figures from angel capital association LINC Scotland suggest investments at the lower end of the market are still buoyant. By September last year, the value of deals had already surpassed the 14m raised in 2007.

David Grahame, director of the firm, says 2008 was a record year for angel investment in Scotland.

Other local businessmen involved in the new venture include Paul Atkinson, managing director of Head Resourcing, Malcolm MacPherson and Andrew Ley of law firm HBJ Gately Wareing and Laurie Dempster, managing director of Albannach Financial Management.