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3 December 1999

PENTA CAPITAL TO RAISE £100M + PRIVATE EQUITY FUND

Penta Capital, the independent private equity investment house formed in September this year, announces that it has formally commenced raising its first fund and has secured significant founding investment from Bank of Scotland. Penta Fund 1 has a target of upwards of £100m, to be raised from UK and European institutional investors.

Penta has a five strong executive team comprising Steven Scott, Rod Begbie, Torquil Macnaughton, Mark Phillips, and David Calder, all formerly with Royal Bank Development Capital. Between them they have over 30 years of experience in the private equity market.

Penta will invest in all types of later stage private equity transactions, including MBOs, MBIs, platform investments and development capital. The focus will be on UK and Irish mid-market companies, valued at between £5 million and £75 million particularly in the leisure, business-to-business services, and IT & communications sectors.

Penta will be supported by its advisory board structure and a focused sector approach, which comprises comprehensive research sources combined with the involvement of leading industry figures.

Mark Phillips, Director of Penta, said: "The UK private equity market has experienced a degree of polarisation upward from the middle market, as the established independent players almost exclusively vie for larger deals. We firmly believe however, that this market will continue to be a major source of opportunity for private equity, particularly in our chosen sectors of focus. The mid-market is primarily serviced by captive houses owned by large financial institutions. As an independent house focusing specifically on the mid-market, Penta combines strong sector focus with an operating model which the captives are unable to provide".

Colin Leslie, Divisional Chief Executive of Structured Banking at Bank of Scotland added: "BoS are a leading provider of senior debt to UK private equity mid-market transactions. We are also an established investor in a number of private equity funds. We have worked closely with the team at Penta Capital for a number of years and are delighted to be supporting them in the formation of their new private equity venture. We are strong believers in Penta's high quality research-led approach to identifying and analysing opportunities and believe this will give them the edge in securing deals".