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British Business Bank makes new £15m commitment to a separately managed account with Prefequity to support UK smaller businesses

Press release 17 July 2025

Today, the British Business Bank announces a new commitment of £15m to a new separately managed account (SMA) managed by Prefequity LLP.  

Investing alongside Prefequity Credit Opportunities II LP, to which the British Business Bank has already committed £30m, this new co-investment vehicle will enable Prefequity to make larger investments into well established, profitable businesses meeting its investment criteria. Prefequity Credit Opportunities II LP is targeting a £150m final close.  

The UK-based private credit firm will target non-sponsored companies – those without backing from a private equity firm – that are seeking capital for growth initiatives such as acquisitions, management buy-outs and capital investment programmes. Their investment strategy is particularly suited to owner-managers seeking an alternative to private equity investment to support their strategic growth and development plans. 

Prefequity is an established private credit manager, focusing on businesses with strong historic performance and EBITDA of £2-10m. Their first fund successfully deployed £100m and has achieved four exits to date. 

Adam Kelly, Managing Director and Co-Head of Funds, British Business Bank, said: 

Following the success of its previous fund, we are pleased to continue our support for Prefequity. This new co-investment vehicle will unlock growth for businesses in the UK’s Nations and regions, providing them with the flexible debt solutions they need to succeed and reach their full potential.

Theo Dickens, Prefequity's Managing Partner, said: 

We are delighted our second fund is off to a strong start and immensely grateful to the British Business Bank and our other investors for backing Fund II and the SMA. We look forward to attracting more LPs in further closings with our investment philosophy that combines downside protection from senior secured loans with the opportunity to partner with high-quality management teams through our equity participation.

Further Information

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Notes to editors

About Prefequity 

Prefequity is a UK-based private credit firm serving the undersupplied gap in the UK lower mid-market. It offers owner-managers flexible debt-based capital solutions as an alternative to private equity to support their strategic growth and development plans.

The firm looks for specific situations exclusively in the UK where it can deploy capital in off-market transactions and targets senior secured loans with low double-digit contractual returns and free equity upside with a low attachment point.

Prefequity applies a partnership approach to the companies it invests in, taking a seat on the board and providing hands-on support to enable them to fulfil their potential. 

The members of the Prefequity team are well established with diverse skillsets, having built up highly successful track records over many years of supporting lower middle-market companies around the UK. 

Prefequity’s first fund of £100 million is fully invested and continues to perform admirably, with 4 deals exited to date generating healthy IRRs and cash multiples. Prefequity continues to make good progress fundraising for its second fund. 

About the British Business Bank 

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government. 

The British Business Bank’s core programmes support over £17.4bn 1  of finance to almost 64,000 2  smaller businesses.

As well as increasing the supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of finance options available to smaller businesses. The British Business Bank Business Guidance provides independent and impartial information to businesses about finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

The British Business Bank is also responsible for administering the government’s three Coronavirus loan schemes and its Future Fund, together responsible for delivering £80.4bn in finance to 1.67m businesses. These schemes are now closed to new applications. 

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. With the exception of BBB Investment Services Limited they are not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority. BBB Investment Services Limited is authorised and regulated by the Financial Conduct Authority. A complete legal structure chart for the group can be found at British Business Bank

The Investment Programme is operated by British Business Investments Ltd, a wholly owned commercial subsidiary of British Business Bank plc. British Business Investments Ltd is registered in England and Wales with company number 09091930, and registered office at Steel City House, West Street, Sheffield, S1 2GQ.

The transaction described above does not constitute or imply any endorsement, warranty or recommendation by the UK government, British Business Bank plc or its subsidiaries or any other party in respect of Prefequity or its products or services. 

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