Promethean Investments, created nine years ago by veteran banker Sir Peter Burt, has launched its second private equity fund with the rescue of high street pawnbroker Albemarle & Bond.
Promethean UK Opportunities Fund will buy the UK's second biggest pawnbroking chain out of administration, leading the deal on behalf of an international investor group.
Sir Peter said the fund, where his sons Michael and Hamish are also partners, now hoped to raise £150 million from institutions for investing in special situation companies. It is thought the first deal will be backed by US private equity group Apollo, who will buy up the pawnbroker's debts.
Albemarle & Bond, which joined the Alternative Investment Market in 1995, saw its shares hit 200p three years ago as it went on a shop-opening spree in response to a soaring gold price.
At its peak its market value topped £220m and it had 183 branches and 900 staff.
But when the gold price sank, A & B was forced to melt down gold jewellery to raise cash, and the group called in administrators on March 25 after its shares were suspended at 6.65p, valuing the business at £4m.
Mike Jervis, joint administrator at PwC, said the deal was the best offer received, it preserved the most jobs and kept the most stores open. "All 120,000 pledged items remain safe and available for the customers to redeem.
"This deal achieves the most positive outcome for customers, staff and landlords," he said.
The chain serves 140,000 customers but fell victim not only to plunging gold prices but increased competition, leaving it with overstretched finances.
On A & B's failure, Sandy Flockhart, a partner in Promethean, said: "They over-extended when the gold price was very high and opened a large number of branches. But it is a long-standing business, it's run on traditional lines in a conservative fashion against asset-backed financing, and has a number of long-standing repeat customers, and (we bought) on the basis we can turn it round."
Promethean said restructuring specialist Stephen Plowman was to be installed with a mandate to reconfigure A&B and refocus it back to its core business lines of pawnbroking and jewellery retailing, and return it to profitability.
"The plan will maintain the majority of stores, in addition to preserving 628 jobs. The new management team, Promethean Investments LLP, its co-investors and PwC will work together to ensure that the transition out of administration is achieved as seamlessly as possible."
Promethean Investments' first fund became the AIM-listed Promethean, which aimed to raise £300m to back a more activist approach than traditional private equity funds. But in 2009 investors voted to wind up the company and liquidate the portfolio, a process due to have been finished by 2012 but dogged by regulatory issues over a surviving investment.
Sir Peter said: "Our first fund returned about 1.9 times the investment. Our plans for this fund are private investment in special situations, anything that requires a bit of hard work and effort." He expects backing from institutional investors in the UK, US and Middle East.
Mr Flockhart added: "We are a fund set up to invest in small businesses in the UK and Ireland, businesses which we think might be good prospects, might be looking for financing or new management, or owners wishing to exit."