16% of North West Fund sent back to Europe
THE North West Fund has lost a further £15m for investing too slowly, taking its total to £155m – down from £185m at its launch.
The cash has been trimmed from the £45m Development Capital sub fund which must invest sums of £100,000 to £2m in growth companies by 2015. It is understood only £5m has been invested since December 2010.
It has been returned to the fund’s backers – the European Investment Bank and the European Regional Development Fund.
Some £15m was sent back to Europe in September for redistribution to “more immediate projects”. This means the fund has lost 16% of its original value.
Last week it emerged that YFM Equity Partners was no longer managing the sub fund and a new institution is being sought.
In July Andy Leach, chief executive of North West Business Finance, the company set up to deliver the fund, departed suddenly and was replaced by banking veteran John McGuire.
In a statement North West Business Finance said: “The North West Fund has submitted a revised business plan that reflects the timeframe the fund is operating in, with all funding needing to be invested by the end of 2015.
“Part of this proposal includes a reduction in size of The North West Fund for Development Capital from £45m to £30m, a more realistic and appropriate amount.
“To the end of September, The North West Fund has invested almost £35m in more than 125 companies across the region, securing more than £25m in co-funding from the private sector. The Fund is now on stride and on track to meet its targets by the end of the year and we are confident of investing £155m by the end of 2015.”
The North West Fund provides debt and equity packages ranging from £50,000-£2m. It is allocated into six pots, each of which has their own fund manager.
The six funds are:
£30m Development Capital Fund
£35m Business Loan Fund, managed by FW Capital
£30m Venture Capital Fund, managed by Enterprise Ventures
£25m Biomedical Fund, to be managed by Spark Impact
£20m Energy and Environmental Fund, managed by CT Investment Partners, part of the Carbon Trust Group
£15m Digital and Creative Fund, run by AXM Venture Capital
