East-Anglian based hospitality business The Chestnut Group has launched a new fundraising round under the Enterprise Investment Scheme (EIS), in which it is looking to raise up to £2.58m, MCA understands.

The company, set up by former banker Philip Turner in 2012, opened its third site The White Horse in Easton earlier this month. Its fourth site, The Northgate in Bury St Edmunds, will open later this summer offering a restaurant and nine bedrooms.

Approximately £1.1m of new money raised will be used to develop and complete the fit out of the two recently acquired sites, with the balance being used to acquire another two.

Turner, a city veteran with 20-year experience in the banking world, has invested £400,000 of his money so far and owns approximately 12% of the business.

He cites three key reasons for launching Chestnut in East Anglia. Firstly, the young epicentre of London is moving east and not west (i.e. Shoreditch) therefore the closest rail links are to East Anglia and Kent. Secondly, Cambridge is an enormous economic driver for the whole region, for example house price inflation is huge and the ripple effect is going out to the likes of Kings Lynn and Bury St Edmunds. Regional commuting is happening, and not just into London. Finally, infrastructure spend is large - the A11 and A14 are two key roads facilitating travel in the region both of which have had a lot of money spent on improvements.

Turner said he wants Chestnut to be a destination pub group with great food, drinks and accommodation (at some venues).

Last month, Turner said he was planning to add another six sites to the business over the next four years.

“We have raised money every year since we started the business and now we’re in the middle of our largest capital raise which will take us through to the next four to six sites,” he said. “It puts us more on the mainstream for major investors.”

Turner said he was currently ‘in negotiations’ on four sites in East Anglia, a region he said offered great potential for his business.

“I don’t expect all four of them to happen, but we should be into at least another building project by the end of this year,” he said. “In terms of locations, I’ll go as far over as the A1 and down as far as Essex.”

“By 2020 I would like to have a turnover of £12m to £15m. It will be more a case of optimising the platform we’ve got than open a large number of sites,” he said.

Turner said he had identified a number of exit routes, but isn’t wedded to a particular one. He said: “Selling to a regional brewer such as Greene King is one option, as is building up enough freeholds within the group so that either private equity investors or even a wealthy individual (for inheritance tax reasons) could consider buying.”