Braveheart boosts its Yorkshire presence with £380,000 buy

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INVESTMENT management group Braveheart is to boost its Yorkshire operation with the acquisition of the company that manages the £48m Finance Yorkshire Equity Fund.

Braveheart has bought Neon Capital Partners, a firm which operates from offices in Barnsley and Leeds, for £380,000.

Neon was established in 2010 to manage the Finance Yorkshire Equity Fund. The fund provides equity and equity-linked finance to small and medium-sized enterprises in the Yorkshire and Humber region.

Braveheart bought Yorkshire investment firm Inkopo three years ago in a deal worth up to £1.31m, renaming it Viking Fund Managers. Viking is led by managing director Andrew Burton, who will run the enlarged Yorkshire business.

“This deal will grow the Yorkshire business by a very great extent,” said Mr Burton. “This is a new beginning for the Yorkshire operation of Braveheart.”

He said the fund will be looking for Yorkshire-based businesses that are larger sized, more established companies, although it will also invest in some start-ups.

“There will be a mix across the board, companies that have management with track records and companies with growth potential,” he added.

Finance Yorkshire has three funds with £90m under management.

The first is the Finance Yorkshire Equity Fund, which will be managed by Braveheart following the deal, which has £48m.

The second is the seedcorn fund, which has £15m, and the third is the business loans fund, which has £27m.

Alex McWhirter, chief executive of Finance Yorkshire, said that both the seedcorn fund and the business loans fund will be unaffected by the Braveheart deal and will continue operating as they are.

“We’ve got fund managers in place for the two funds. It’s a very good position for Finance Yorkshire,” he said.

Braveheart said the deal will consolidate its position in Yorkshire.

Geoffrey Thomson, chief executive of Braveheart, said: “This acquisition is an important milestone for the company and is a direct result of our strategy to grow the fee earning side of our business by increasing funds under management.

“Neon comes with a fund management contract that provides us with long term visibility of earnings whilst consolidating our position in Yorkshire.”

He said the acquisition is the result of intensive negotiations which started earlier this year.

“When taken together with our recent £50m fund management award in Northern Ireland, these new funds under management advance us significantly towards our goal of achieving regular sustainable profits from our fund management operations,” he added.

Braveheart, which is listed on AIM, specialises in venture capital investments and investment services to business angels, high net worth individuals, family offices and public sector organisations.

Braveheart bought Neon from NF Holdings Limited.

Neon, which is authorised and regulated by the Financial Services Authority, has not traded. The management services for the fund were performed by another company in the NF Holdings group. This arrangement was put in place while Neon was in the process of getting the necessary authorisations from the FSA.

Neon employs five staff and has one subsidiary company, which acts as the general partner to the fund.

The Finance Yorkshire Equity Fund was established by Finance Yorkshire as part of the European JEREMIE Fund initiative. It is scheduled to run until 2018 with an investment phase that lasts until December 2013, unless extended.

Both Finance Yorkshire and the FSA have given approval for the change of control, as required under the fund’s management agreement and the Financial Services and Markets Act 2000.

The deal will boost its position in Yorkshire, where it already operates the Viking Fund, the Viking Loan Fund, and the Yorkshire Association of Business Angels.