Clin-Tec investment written down

A PRIVATE equity firm expects to have to write-down the value of its investment in Scottish research company ClinTec just months after spending £8 million to buy a 28 per cent stake.

Aim-quoted Elephant Capital blamed underperformance at the Glasgow-based company, founded by Rabinder Buttar, for the move which is likely to see a 2.1 million charge in its interim results.

Despite rapid expansion by ClinTec over the past year, with new offices in Europe and a strengthening of its Indian operations, Elephant said revenues had been slower to come on stream than anticipated as some projects did not convert to orders at the rate expected and others were cancelled. As a result, future projections for the company's progress have been "scaled back".

Elephant's chairman Pramath Raj Sinha admitted that the underperformance and the writedown had been disappointing but that his investment company "continues to believe that ClinTec's business model is sound and is hopeful that this investment will generate value for us over time".

Elephant, which specialises in investments related to India, bought the stake in ClinTec through its Tusk Investments Fund. Gaurav Burman, managing partner of Elephant, also pumped in 150,000 of his money, with fellow director James Hauslein investing 200,000. As part of the deal, Elephant appointed three directors to ClinTec, expanding the board to seven.

Buttar founded ClinTec in 1997 and has grown the business using her money. The firm - which carries out clinical research work for pharmaceutical firms, biotechnology companies and medical device makers - opened an office in Bangalore in 2002.