Midlands Engine fund picks up pace after uncertain start
The Midland Engine Investment Fund says it has reached a £50m milestone.
The Fund says it has made over 150 investments in firms across the Midlands – including £19m of private sector leverage.
The figure is despite a slow start to the Fund. In January, TheBusinessDesk.com revealed that just 6% – or £15m – had been paid out to firms.
The £250m fund was announced by George Osborne in his final Budget in March 2016. Problems with the procurement process meant that it was August 2017 when the first £120m became available and another six months before applications opened for the £92m allocated to the equity finance funds.
The MEIF was trumpeting a “£50m milestone” at an event held in Leicester last night, although the MEIF has so far committed £31m. The remaining £19m has been leveraged from the private sector.
In a statement, a spokesperson from the British Business Bank said: “The Midlands Engine Investment Fund is on track. Both our debt and equity funds are now well established in the marketplace across the East and West Midlands.”
The MEIF is split between six fund managers. Maven Capital is responsible for providing loans of up to £1.5m and has £50m for the West Midlands and £40m for the East Midlands. The small business loans funds, which can provide loans of up to £150,000, are managed by BCRS, which has £17.5m to distribute in the West Midlands, and First Enterprise, with £12.5m for East Midlands businesses.
The equity finance is split between three fund managers. Midven and Foresight received £34.5m each to operate a venture fund in the West and East Midlands respectively. Mercia Fund Managers has £23m for its proof of concept and early stage equity fund that covers the whole of the Midlands.
The taxpayer-funded MEIF has consistently refused to provide any breakdown of the performances of the individual funds and again has declined to do so.
The £250m MEIF brings together funding from Government, the European Regional Development Fund, British Business Bank and European Investment Bank. The 10 Midlands Local Enterprise Partnerships (LEPs) have redirected £79m of their European funding from a 2014-2020 programme into the MEIF.
Communities Secretary and Ministerial Midlands Engine Champion Rt Hon James Brokenshire MP, said: “As Midlands Engine Champion in Cabinet, I am determined the Midlands should harness its full potential and be at the heart of an economy that works for everyone. A community where businesses and people can thrive, through well-paid jobs, high standards of living and greater economic growth are at the very core of our ambitions for people in this area.
“An invigorated Midlands Engine is pivotal to our Modern Industrial Strategy. This is why it’s an enormous pleasure to celebrate the contribution the Midlands Engine Investment Fund continues to make in supporting SME businesses to grow, boost the area’s productivity and make the Midlands an even better place to do business.”
Patrick Magee at the British Business Bank, said: “The Midlands Engine Investment Fund was set up to address a market gap in finance available to SME’s across the region. Investment can often be crucial in allowing firms to explore emerging opportunities and expand, without it growth stalls.
“By hitting this milestone, only months after passing the £25 million mark, we are reaffirming our commitment to Midlands’ businesses, providing much needed investment and helping many fulfil their growth ambitions.
“Through our six fund managers, strong network of LEPs and the private sector, we have fostered a real sense of regional collaboration. This has been pivotal to the success of the MEIF and will continue to play an important role as the Fund achieves new milestones in the future.”
