Praetura Ventures seals deal to run powerhouse fund

Praetura Ventures has won the tightly fought battle to run the five year equity slice of the £660m Northern Powerhouse Investment Fund, which will be launched in Leeds today.

The Manchester-based venture capital investor ousted Maven Capital Partners, which had been running the fund since 2017.

Ken Cooper, managing director, British Business Bank

Ken Cooper, managing director, venture capital solutions at the British Business Bank, told TheBusinessDesk.com that: “It’s no reflection at all on the fund manager that we had in the first phase of the investment fund because they have done a very good job.

“I think it’s a reflection of the fact that we will always run a very fair and open process. And so David Foreman put a better proposal to us and as a result of that, we did a very thorough due diligence process. We interviewed them, we did a lot of research on their track record and the plans they had to deploy.

“I think they’re going to do well, they really are committed to the whole northern powerhouse ideal. I think we’re going to have a good fund.”

In 2022, Praetura’s efforts to secure the deal began with a research report showing how the UK economy is losing out on a potential £92bn to GDP due to a shortfall in funding in the North.

The report – What’s Powering the Powerhouse? – claimed that the lack of capital through equity funding, accelerators and support that amounts to £4.97bn in the North West, £3.8bn in Yorkshire and Humber and £1bn in the North East, totalling almost £10bn.

Cooper also said there are far fewer restrictions on the sectors that the equity fund can invest up to £5m in, and the scope of the fund has been expanded to the North East, which Maven have been awarded. Mercia will run the fund in Yorkshire and Humber.

Also in the North West, GC Business Finance & River Capital will manage the smaller loans part of the fund (£25,000 to £100,000), FW Capital will be responsible for larger loans (£100,000 to £2 million).

Since the launch of the first Northern Powerhouse Investment Fund in 2017, it has delivered over £570m of direct and private sector co-investment into 608 businesses in the North West, creating close to 3,500 jobs.

Aiming to build on the success of the initial fund, Northern Powerhouse Investment Fund II will also drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses across the North.

It will increase the supply and diversity of early-stage finance for Northern smaller businesses, providing funds to firms that might otherwise not receive investment and help to break down barriers in access to finance.

Providing loans from £25k to £2m and equity investment up to £5m, the Fund will continue investing into companies operating within the North West, Yorkshire and the Humber and Tees Valley. It has now expanded to include the whole of the North East enabling businesses across the whole of the North to access the Fund to start up, scale up or continue on their growth journey.

Louis Taylor, chief executive of the British Business Bank, said: “The success of the first Northern Powerhouse Investment Fund has proven the instrumental change that access to finance can have for small businesses. From creating hundreds of jobs to developing ground-breaking products, we have seen companies that previously lacked funding options accelerate forward in their growth journeys, which has ultimately benefitted the whole of the Northern economy.

“This is why it was important to continue the Northern Powerhouse Investment Fund into its next phase. With further funding available, and a greater geographical reach in the North East, the Northern Powerhouse Investment Fund II will engage more stakeholders across the regions, bringing the business community closer together to create more opportunities for entrepreneurs everywhere.”

Following today’s official launch in Leeds, the British Business Bank will be holding a roadshow of events for small business finance intermediaries across the region to provide more information about the fund. Destinations include Newcastle (18 April); Manchester (24 April), and Sheffield (30 April).