Barclays backs property magazine buyout

Barclays ventures continued its foray into internet investments yesterday when its private equity finance arm invested £2.8m in the management buyout of the Brighton- based online magazine, Find a Property, from its founder Andrew Pendery.

Barclays ventures continued its foray into internet investments yesterday when its private equity finance arm invested £2.8m in the management buyout of the Brighton- based online magazine, Find a Property, from its founder Andrew Pendery.

The company, formed in 1997, has a turnover of £2m and a healthy 40 per cent net margin. The business provides online advertising for more than 2,150 customers, mainly independent estate agents. The majority simply pay a daily rate to advertise, and the site receives 2 million visits a month and advertises 100,000 properties.

Jeremy Morgan, director at Barclays Ventures, said: "We have a very successful track record in backing internet-based business models. We have an appetite to support similar businesses with growth aspirations. Barclays Ventures have an investment in Iglu.com and recently sold Medhotels.com to lastminute.com.

Bernard Hewitt joins as chairman, having previously worked with Barclays Ventures investments. Barclays has invested £2.7m in equity - with the directors putting in £100,000 - and has also put in place a £400,000 loan to cover deal costs and working capital.

Neil Anderson, operations director of Find a Property, said Barclays Ventures' experience of internet stocks was undoubtedly a factor in cementing the deal after the company considered around 20 other venture capital houses. "The management buyout will enable Find a Property to continue its' impressive growth rate of 40 per cent and beyond. We will expand our base of estate agents across the UK and overseas," Mr Anderson said. "With additional employees we will bring new products to fruition soon." The company employs 18 people.

The dot.com bubble, which boomed during the late 1990s, burst spectacularly in 2000 leaving scandals of overhyping in its wake, particularly in the US. Institutions and private investors had invested in some companies with four-figure PE ratios and some which had never recorded a profit. Investors have been treading cautiously where internet stocks are concerned ever since.

David Charles, of M&C Ventures, said although internet start-ups were just as difficult at attracting funding as they were at the time of the burst, there was much more activity among those businesses set up three of four years ago, businesses which are now generating revenue and profit streams.