Appian Rides Private Equity Mining Wave with Debut Fund

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Mining-focused private equity fundraising has soared in the last two years amid a dearth of traditional sources of retail capital and bank debt in the sector

Alec Macfarlane

Appian Capital Advisory, the metals and mining-focused private equity firm founded by former JP Morgan Cazenove banker Michael Scherb, has closed its debut fund, joining a rush of private equity funds looking to profit from the dearth of traditional sources of capital in the sector.

The London-based firm said Wednesday that it has closed its Appian Natural Resources Fund with commitments of $375 million.

The Fund launched in January 2013 and was oversubscribed after six months of fundraising, according to Michael Scherb, founder and general partner at Appian.  The fund received around $1 billion of interest, although the firm set a hard cap of $375 million from a small group of investors.  The firm also has access to an additional pool of capital of around $375 million through its network, which may be used to participate in co-investment opportunities alongside the main fund.

The fund invests between $10 million and $100 million in small to medium-sized assets or companies in the metals and mining sector in Latin America, North America, Africa and Europe.  In August last year Appian agreed its first deal, an investment in Red Eagle Mining, a Vancouver, Canada-based company with mining projects in Colombia. The firm is also set to announce a further two deals in Africa and Latin America in the coming months, according to Mr. Scherb.

The fund is looking to more than double its investors’ money, Mr. Scherb said.  Mercury Capital Advisors acted as the placement agent for the fund.  Appian was set up in 2012 by 32 year-old Australian national Mr. Scherb, who previously worked in the investment banking team foucsed on mining at JP Morgan Cazenove in London.  He has been involved in a number of high-profile mining-related M&A deals in the past, which include advising Rio Tinto on its defence against a $153 billion unsolicited approach from BHP Billiton.



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