Praetura to raise £10 million on public markets for Northern venture fund
Manchester-based venture capital investor Praetura is to raise £10m to invest in northern businesses and float the business on the stock market.
Praetura directors will personally invest £1.02 million in the Venture Capital Trust (VCT) and believe the fund will provide better value for investors who are paying over the odds for investments in the South where competition between multiple venture capital investors can create inflated valuations.
Praetura has appointed former Puma Investments COO of eight years Sam McArthur as a partner. McArthur successfully launched several VCT and EIS funds, and grew Puma’s assets under management from circa £100 million to circa £950 million during his time there. In his new role, he will help expand Praetura Investments’ range of alternative retail investment offerings and outreach to financial advisers across the UK.
McArthur told TheBusinessDesk.com this morning (15 June 2023) that the fund will be uniquely northern in character.
“This is the first new VCT launched by a manager for some time. The VCT market is made up of around 25 managers, most are based in London and the South East.
“The fund will be an evolution of the principles that drive us at Praetura, but to reach a different investor audience and play our part in the growing start-up and scale-up ecosystem in the North.”
McArthur, alongside Praetura partner Jon Prescott, will also be responsible for forging relationships with investors and advisers, as well as driving plans to double the size of the Praetura’s distribution and client services teams. The business plans to appoint key hires across the UK, including Scotland, the Midlands and the South East of England.
Lawyer Paul Jefferson from Gateley is the chairman of the business intending to float and said in the introduction to the prospectus that the objective is to “rise to the UK Government’s levelling up agenda by providing growth funding to scalable businesses predominantly based in the North of England.”
Jefferson also highlighted Praetura’s research paper entitled, ‘What’s Powering the Powerhouse’, which looked at the Northern funding landscape for start-ups and entrepreneurs.
“The North of England accounts for around 20% of all the UK’s economic output, population and active companies, but only around 7% of the UK’s venture capital investment is deployed in the region. This compares unfavourably with London which, like the North, contributes around 20% of the UK’s economic output, but accounted for over 68% of venture capital investment in the UK between 2020 and 2022 (Q2). It is this structural imbalance in the UK venture capital market that the Board believes presents an attractive opportunity for investors and for which the Company is in a unique position to utilise.”
Praetura Ventures’ existing investment funds carry a bias towards opportunities in the North, targeting a two-thirds allocation-to-deals ratio in favour of deals based outside of London.
Since its formation in 2011, the wider Praetura Group has built up a lending and investment business with assets under management of over £544 million, including Praetura Ventures which has £213 million invested.
Its EIS Growth Fund launched in 2019 has raised over £128 million and has grown its current portfolio to 37 businesses, 21 of which are based in the North of England, including Peak, BankiFi, Patchwork, Culture Shift and XR Games.
Praetura Ventures’ manages £40 million across two institutional funds, the Regional Angels Programme from British Business Investments and the GMC Life Sciences Fund from the Greater Manchester Combined Authority (GMCA), Cheshire and Warrington LEP and Alderley Park Holdings Limited.
