Northern-based investor PHD Equity Partners has kicked off a fundraising for its Fund 2 after revealing that its maiden fund is on target to deliver an IRR of 24.6 per cent.

Targeting companies with a valuation of up to £10 million, Fund 2 will be supported by high net worths, alongside PHD partners, and invest a minimum of £1.75 million.

PHD managing partner James Dow believes that the ‘exceptional performance’ of Fund 1 has created strong support from the firm’s existing investors – allowing PHD to now develop its investment business.

Of the strongest performances from its Fund 1, car parking ticket printer Liberty Services was sold to Capita in January 2014 – netting a 9x return on investment.

Andy Dodd, partner at DHD, adds, ‘Through Fund 2, we will continue to build on the success of our proven capability to partner with emerging growing businesses and implement operational change and strategic initiatives to accelerate growth and enhance shareholder value.’

Other 2014 deals involving PHD Equity Partners include the sale of the Energy Solutions Group, alongside Bridgepoint Development Capital, to SSE for an initial consideration of £66 million.

PHD expects to reach its £25 million target this year, with an initial close set for mid December. The fund is chaired by Lord Daresbury, who formerly chaired hotels and leisure group De Vere.