Braveheart hurt by former subsidiary Envestors

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BRAVEHEART Investment Group swung into the red in the first half of its financial year, with its former subsidiary Envestors largely blamed for the loss.

The Aim-listed investment group, headquartered in Perth, with operations in Yorkshire and Belfast, has around £121m of funds under management and provides equity, loan and mezzanine funding to small and medium-sized enterprises (SMEs).

In its results for the six months ending September 30, the group said that fee-based revenue remained steady at £1.32m, compared to £1.36m in the same period a year previously.

But the group recorded a loss before tax of £845,000, compared to a profit of £67,000 a year previously.

Braveheart Investment Group said that £805,000 of the losses were directly attributable to corporate finance house Envestors, a London-based subsidiary which encountered “poor trading conditions” and was sold this month to a management buyout team. Envestors manages Yorkshire Association of Business Angels.

Geoffrey Thomson, chief executive of Braveheart Investment Group, told the Yorkshire Post: “You can see from the results the damage that has happened to us came pretty much entirely from the Envestors side and it was a very disappointing six months, but we determined in July to dispose of the business, and, in fact, in the longer term we were looking to dispose of the business anyway as it didn’t quite fit with the business we are trying to build, but because the first quarter was so bad we accelerated the disposal process.”

The £805,000 worth of losses attributed to Envestors included £195,000 as a result of its trading losses and £610,000 due to the impairment of goodwill and intangibles on the sale of the business.

Braveheart Investment Group includes Barnsley-based Viking Fund Managers, which manages the £48m Finance Yorkshire Equity Fund, the £5m Viking Fund and the £1m Viking Loan Fund, all of which provide funding for SMEs in Yorkshire and Humber regions.

The Viking Fund specialises in providing finance for early-stage technology companies.

It is led by Andrew Burton, a former secretary of the Yorkshire Association of Business Angels. The Finance Yorkshire Equity Fund had a “good” second quarter concluding 13 investments, totalling £4.34m, said the group.

Now that Envestors has been sold, Mr Thomson said that the group is in “good shape”.