Fanfare as £2.5bn business fund launches in Birmingham
THE £2.5bn Business Growth Fund launched in Birmingham yesterday has already made an equity offer to one of 10 businesses that have been deemed eligible for support.
Chief executive Stephen Welton told an audience in Birmingham’s Council House the Fund aimed to support mid-cap businesses with high growth potential, and that one which had approached the organisation before its official launch was in advanced negotiations.
He said: “Barely eight months ago, in October 2010, the Business Growth Fund began life as a 37-word sentence published in the Business Finance Taskforce report.
“Today it is open and ready for business. We have three offices in Edinburgh, Birmingham and London; nearly 30 staff, FSA authorisation to operate, a new website, online application process, and most importantly, up to £2.5bn to invest in growing UK companies.”
The Fund was set up in the wake of the banking collapse as a key recommendation in the Merlin Report, which demanded that banks do more to help businesses.
The BGF will target businesses with turnovers of between £10m and £100m that need funding to support high growth potential. The fund will invest sums between £2m and £10m in return for equity stakes of up to 40%.
Business Secretary Vince Cable and BGF chairman Sir Nigel Rudd also attended the launch.
Dr Cable said: “The fund is ready to make substantial equity investments into ambitious mid-cap British companies who are set to create the business success stories of the coming years.
“Good investing requires local connections to find and assess opportunities, so for the fund to have a presence outside London – in both Birmingham and Edinburgh – is particularly heartening. British businesses must have access to the growth capital they need, wherever they are based.”
Sir Nigel Rudd said: “I believe the Business Growth Fund offers a real ray of hope to companies that are emerging out of recession. Companies that have the confidence, ambition and ability to seize new opportunities and new markets in the UK and abroad.
“Our ambition is nothing less than to create the household business names and listed companies of tomorrow.”
TheBusinessDesk.com revealed earlier this year that the BGF was considering Birmingham as its operational base, and Business Birmingham, the city’s inward investment programme, led the bid to lure the fund from London.
Birmingham City Council leader Mike Whitby said: “I am particularly encouraged by the potential of this £2.5bn fund to fill a growth capital gap for the city’s large SMEs.
“This fund will help successful businesses to develop, expand and ultimately contribute to the rebalancing of the UK economy.
“Moreover, it will focus on companies whose growth would have a serious impact on the economic health of Birmingham and the Midlands, such as businesses with high growth potential that own innovative intellectual property but are facing funding difficulties.”
The BGF is backed by five of the UK’s largest banks – Barclays, HSBC, Lloyds, RBS and Standard Chartered working in collaboration with the British Bankers’ Association.
