Launch of £25m fund to invest in Yorkshire firms

The investment business, based at the 3M Buckley Innovation Centre in Huddersfield, claims its investments over that period would lead to the creation of around 300 jobs and the safeguarding of hundreds more.

One Degree Capital was launched by entrepreneur Prof Graham Leslie, former marketing director at the Co-operative Group Patrick Allen, and finance expert Richard Smith. Prof Leslie and Mr Allen had previously been working informally together on various projects but they decided they needed a vehicle for their investment businesses.

Barnsley-based Direct2Mum, a family-run business which offers an online community for mothers and parents who want advice on pregnancy and parenting, as well as selling baby and toddler products, has received an investment of £5m from One Degree Capital. The funding will help build the Direct2Mum brand in the retail sector.

The firm, which sells products ranging from travel and safety items, cots and prams, to feeding and bath time accessories, was launched in 2010. Prof Leslie, Mr Allen and Mr Smith will join as Direct2Mum board members.

Initial investments by One Degree Capital have been made in sectors including retail, leisure, pharmaceuticals, technology and construction. Mr Allen, who is also managing director of the 3M Buckley Innovation Centre, said: “We have a fund available of about £15m currently.

“We are raising another £10m, so we are around about £25m, £10m of which will go into the retail sector.

“We are investing in buying rural petrol filling stations, mainly in North Yorkshire to begin with. We are looking at businesses in rural communities. We think there’s an opportunity there.

“Our product is really around an upmarket farm shop which also happens to sell fuel.”

Mr Allen said that the venture aims to fill “a gap in the market” where consumers are looking to buy locally amid tough economic conditions.

One Degree Capital has also backed an online business called Go Dine, which provides a restaurant bookings service. It is based in Nottingham but is launching its offering in the Leeds area.

Mr Allen said that One Degree Capital “takes a hands-on approach with the businesses they invest in”, as well as taking a small equity stake.

“Instead of stripping them of their assets, we get our hands dirty and look at ways of driving sales and profitability, whilst developing the management teams and building for the long term.”

He added: “We look at direct investment from our own pool of funds. We are working with several banks where we will secure funding for companies, so one of the other companies we’ve invested in is a medical business.

“Now that has a secured funding line and it’s our property portfolio that is securing the funding line.”

So far, One Degree Capital has invested in about eight companies.

Managing director of Direct2Mum, Alex Leslie, Prof Leslie’s son, said: “Our online retail has been so successful, having already generated revenue of £1m this year, that we decided it was time to grow that side of the business.”

Prof Leslie, chairman of One Degree Capital, said: “Many companies need our help, not only in terms of investment, but also in helping management teams meet their longer term objectives. This may be through connecting them with new customers or suppliers, creating wealth through other forms of finance, or through input into product development and marketing.

“We don’t just invest in anyone or anything. We are not focused around short term returns and exit strategies.

“We aim to support sustainable business growth, safeguard and create jobs, and turn companies around so they become an important part of their local communities, and ensure that they are still trading for many years to come.”

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