YFM supports growth of commodity broker with GBP3.75m investment

Submitted 14/12/2020 - 11:05am

YFM Equity Partners (YFM) has made a GBP3.75 million investment into ARRACO Global Markets (ARRACO), the award-winning and disruptive interdealer broker for global commodities, from its managed VCTs, British Smaller Companies and British Smaller Companies 2. 

The investment will allow ARRACO to drive the next stage of the company’s growth as it expands its product offering and global footprint.

 
Founded in 2015 on the principles of first-rate customer service and a diverse workforce that reflects its client base, ARRACO has grown quickly and taken market share in an industry that rarely sees new entrants or disruptors.
 
ARRACO’s unique approach has resulted in rapid expansion; it has grown to a GBP4 million revenue business, doubling revenue each year. The business, which is headquartered in London, currently has a team of over 70 staff that speak 14 languages and desks covering Power, Gas, LNG, LPG and Renewables servicing clients including oil majors, global trade houses, energy utilities, shippers, banks and funds.
 
The GBP3.75 million in funds provided by YFM will be used to expand ARRACO’s established UK footprint, hire additional people, invest in its team and broaden its product offering. In addition, ARRACO will open two new international offices in Singapore and Houston, which together with offices in London and Tokyo, will give the combined group 24-hour market coverage.
 
ARRACO co-founder and CEO, Tom Roberts, says: “We are delighted to announce this investment which will allow us to remain independent, continue our rapid growth trajectory and significantly extend our range of product desks. I’m particularly excited about establishing two new international offices in Singapore and Houston, from which we will be able to provide global coverage for our clients and improve liquidity in Asia and the US.
 
“ARRACO is very much a people business and relationships are very important to us – as soon as we met the team at YFM, we really liked them and knew they were the right fit for us. We share a similar culture, with ESG at the core of both businesses, and we like the fact they have national coverage and understand regional businesses. We were looking for supportive investors to work alongside us as we grow the business and YFM have a great track record in the market.
 
“We’ve generated significant growth over recent years and have had great success with our unique and highly personalised approach to the market. It’s an exciting time for ARRACO and I look forward to building on this, as we look to expand the products and service we provide for our clients.”
 
David Wrench, Investment Director at YFM, says: “There’s no doubt that ARRACO is a business with huge potential – it has doubled revenue every year and benefits from being led by a dynamic team with real vision to drive forward and differentiate themselves in what has been a fairly stagnant market. We felt immediately drawn to their innovative business model with a young, ambitious team of multi-lingual brokers focused on building strong client relationships.
 
“As we had tangential experience supporting a global aviation broking provider expand internationally, we felt that we understood ARRACO’s growth journey and could add real value.”
 
The YFM team comprised David Wrench, Helen Villiers and Jamie Roberts. Rachel Turner and Helen Higginbotham of HCR LLP provided legal advice; financial diligence was carried out by Paul Read and Corin Briault-Hutter of HMT LLP; with commercial diligence provided by Geoff Rampton of RP Advisory Ltd. Anna Cornwallis of Stratton HR provided management and people diligence; Richard Joyce of Grant Thornton provided technical diligence; Jonathan Harrison of Aon looked after insurance diligence; and Philip Hare & Associates provided VCT advice.
 
For ARRACO, Andrew Woolf and Bethany Silkin of Fox Williams provided legal advice; and Andy Hodgetts and Hamish Rosser of Buzzacotts acted as corporate finance advisers.
 

Tags Deals & Transactions Investments