Fund aims to invest £50m in region’s businesses

A FUND which plans to invest up to £50m in fast growing businesses in the North of England this year has established a base in Yorkshire.

The Business Growth Fund (BGF), has opened a new office in Leeds, as it seeks ambitious local entrepreneurs who need investment.

BGF investment director Richard Taylor will be based at BGF’s Leeds office, in One City Square. BGF’s investment team for the North of England is headed by regional director, Andy Gregory, who leads a team of six from Manchester.

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BGF is looking to recruit further investment professionals in the North, at least one of whom is likely to have a focus on Yorkshire.

BGF’s IT strategy director, Jon Eggleston, a member of the firm’s management committee, will also be based in Leeds.

Mr Eggleston works closely with BGF’s regional investee companies in a mentoring role and, caries out due diligence on behalf of the fund ahead of investment.

Mr Gregory said: “2012 was a good year for BGF – our first full year of operation. During 2012, we invested approximately £120m of growth capital in 21 great businesses, significantly expanding the level of investment going into the UK SME (small and medium-sized companies) sector and highlighting that, despite challenging economic conditions, good businesses can prosper.

“Five of these businesses are based in the North: Barburrito, the award winning Mexican restaurant chain; Springfield Homecare, a deliverer of personal care for seven local authorities in Yorkshire; Seacroft Care Village, a new residential care home and provider of independent living for elderly people in Leeds; Boost, the rapidly expanding juice bar chain; and Wear Inns, a highly successful north east based pub company. “Collectively, they employ more than 1,000 people and represent a variety of industry sectors.

“Across the UK we have invested in companies employing from seven to more than 600 people and in 13 different sectors – from healthcare to oil and gas services, and from leisure and hospitality to IT and telecoms. Our combined businesses have a turnover of over £300m – an indicator of just how important these companies are to the engine of the UK economy.

“There is an addressable market and clear demand for growth equity among the UK’s small and medium-sized businesses. BGF offers a critical additional source of funding and is playing an increasingly central role in expanding the pool of long-term capital available to growing companies.

“The last two years each saw roughly 60 similar investments made in the UK... until now there simply has not been enough capacity to create profile and momentum for minority equity providers, and therefore, to see the market expand.

“However, while this is undoubtedly much needed progress, we are under no illusions that there is still a lot to be done – and this is our focus for 2013.

“Our own commissioned research indicates that there are in the region of 4,000 British companies with more than ten employees, and a turnover of between £2.5m and £100m, that are growing at ten per cent or more year- on-year. Around 15 per cent of these businesses are based in the North of England. We need to see these numbers increase.

“We are working hard to inspire more entrepreneurs in this region and look forward to making a real difference to the local community of small and mid-sized companies that need guidance and support, as much as funding, to achieve growth in 2013. BGF’s regionally focused approach to investment is core to what we do and this has brought us into contact with a range of local advisers and lawyers, with whom we look forward to working with.

“We remain very ambitious for the year ahead. We see the potential to invest up to £50m in the North of England this year. This is a real cause for confidence.”

Mr Gregory said he saw BGF’s role as providing a catalyst for growth in the economy, because its investments provided a boost for the wider business community. According to Mr Gregory, 2013 will see BGF’s own business grow significantly.

Yesterday, Mr Gregory said it was important for BGF to “be on the ground” in Leeds. He added: “We want to work with the local market and be engaged with it.

“We have got quite a few companies in Yorkshire we are speaking to. There is a good pipeline across a broad range of sectors.”