City AM investor revealed

City AM, the London financial freesheet, has sold a 5% stake in the company to Scottish businessman Kevin Doyle,MediaGuardian.co.uk can reveal. The deal was agreed several years ago and speculation about the identity of the investor have been circulating ever since, but the identity of the buyer has never been disclosed. Explaining his decision to invest in the paper, Doyle told MediaGuardian.co.uk: "I liked the model, I like the principle and I thought that's the way the [newspaper] market was going." He said that the decision by the London Evening Standard's new owner Alexander Lebedev to take the London paper free demonstrated that City AM, launched in 2005, had "stolen a march" on rivals. Doyle added: "I think their model can be extended to other areas." The paper is owned by a number of investors, including the co-founders, publisher Jens Torpe and Lawson Muncaster, the managing director. Three Dutch and Russian backers bankrolled its launch, providing between £5m and £10m. They own half the title, and the founders own the other 50%. Muncaster sold the 5% stake to Doyle in 2006. According to accounts filed at Companies House, the title made a loss of £363,000 last year, down from £1.3m in 2007. Total losses since the paper was launched now total £7.4m, according to its founders. It is believed Doyle paid about £400,000 for his stake at a time when the business was valued at £10m. It is now worth about £20m and is on track to make pre-tax profits of £2m in 2011. Muncaster said he had drawn on Doyle's business experience repeatedly since helping to found the paper. "It is amazing how many sleepless nights I've avoided because Kevin has been on the other end of the phone," he added. City AM distributed an average of 94,566 copies daily in February, according to the Audit Bureau of Circulations. It recently announced plans to extend its distribution network by handing out copies in dozens of additional stations used by commuters outside its heartland in the City of London and Docklands. • To contact the MediaGuardian news desk email [email protected] or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000. • If you are writing a comment for publication, please mark clearly "for publication".