Fund managers appointed to run £185m fund
Source: North West Business InsiderSix fund managers have been appointed to manage the long-awaited £184.8m North West Fund, formerly known as the Venture Capital and Loan Fund. The fund will be one of the largest public sector funds of its kind in Europe and is expected to create or safeguard almost 14,000 jobs in the region over the next five years. It has been parcelled into six sector funds, but the selection board from North West Business Finance (NWBF), the body set up to administer it, has looked outside the region for four of the six management contracts. The six successful fund managers have also been tasked with raising additional finance of more than £200m to generate total funding in excess of £400m.
About the fund
The contracts to manage the North West Fund have been awarded to YFM Private Equity, EV, FW Capital, Spark Impact, CT Investment Partners and AXM Venture Capital. Only YFM and EV currently have offices in the region. FW Capital has pledged to set up three offices in the North West, while CT and AXM will each open two. Spark Impact will open one new office. A total of 48 staff will be dedicated to managing the North West Fund, which will be ready to receive applications for funding between July and August.
Development Capital
The £45m Development Capital fund will be managed by the Manchester-based team at YFM Private Equity. It will provide expansion capital for small businesses in the form of provide flexible equity and loan packages. The fund will also have a broad sector range, but with an emphasis and focus on the regional economic priority sectors, including technology.
Business Loan
FW Capital, the North East subsidiary of Finance Wales, will manage the £35m Business Loan fund. Loans of between £50,000 and £250,000 will be available to growth businesses whose investment and funding needs are not fully met by the banking sector, including the Enterprise Finance Guarantee Scheme.
Venture Capital
Preston-based EV will run the £30m Venture Capital fund, set up to provide early-stage finance. It will cover proof of concept, pre-start, start-up, seed capital, gap venture finance and venture capital funding, including follow-on investments.
Priority sector funds
The three priority sector funds – biomedical, energy and environmental, and digital and creative – will provide both venture capital and development capital investment. Spark Impact will manage the £25m biomedical fund, CT Investment will manage the £20m energy and environmental fund, and AXM Venture Capital will manage the £15m digital and creative fund.
Fund targets
NWBF’s chief executive Andy Leach told Insider that the targets for the sector funds to bring in additional capital were “informal agreements” and were an alternative way of leveraging capital to the model of the earlier Merseyside Special Investment Fund (MSIF), which required companies to match the funding. He added: “Match funding at the investment level just added a layer of complexity to a decision. There was also the feeling that the MSIF was soft money. This definitely won’t be.”
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