Chrysalis chief says £30m fund could create 3,000 jobs

MANAGERS of the new £30m Chrysalis Fund have already been working with “six or seven” potential projects which could generate a combined 3,000 jobs between them, according to chairman Jim Gill.

Mr Gill said that the projects, which could take up the entire £30m allocation if approved, have undergone preliminary due diligence as part of an exercise undertaken by fund managers to prove that there is demand for the money.

The Chrysalis Fund was launched at an event at Liverpool’s Hope St last Thursday, although the manager with day-to-day responsibility for investing it, John Tatham, said that he had been working on the project since 2005.

Mr Tatham said that all of the projects with which the funders had already been working would now have to re-apply for the money to ensure a level playing field with developers and companies looking to bring their own projects to the fund for potential investment.

The £30m investment pot has been provided by the European Investment Bank through the Joint European Support for Sustainable Investment in City Areas (JESSICA) initiative.

It will be managed by the Igloo consortium, comprising Igloo Regeneration, agents GVA and funding partners Royal Bank of Canada.

The fund can provide investment by way of equity, mezzanine or loan investments and can sit behind senior debt provided by banks, taking a second charge over assets provided as security. It can provide up to half of the funding for a particular project but cannot invest more than 20% of the fund (£6m) into a single scheme.

“The fund managers have been set some testing targets,” said Mr Gill.

TheBusinessDesk.com understands that around a third of the money is expected to be allocated to projects by the end of 2012. Mr Tatham said that the consortium has until the end of 2015 to draw down the £30m fund, but that he expects all of it to be indicitavely allocated to projects 12 months prior to the draw-down date.

Mr Gill said: “There’s been a bit of due diligence done on a few schemes already, so we’d say we’re realistically optimistic.

“If we get two to three of these away it will be a very good start.”

Mr Tatham encouraged developers who feel they have commercially viable projects to speak to fund managers as quickly as possible. Returns from projects will be used to create a new permanent investment fund for stalled Merseyside schemes.

“I don’t want to say first come, first served, but the quicker the bids are in, the quicker they will be considered and they will stand the best chance,” he said.

He said that a 12-month delay experienced in gaining approval for JESSICA funding throughout the region had been put to good use to secure state aid exemption for projects. This allows it to take a “more pragmatic” view on funding projects which have a broader benefit to the economy.

He added: “My dream project would probably be a high-growth business that wants to invest in its own premises but the bank would say that its own covenants are not strong enough. For something like that, there is a financial benefit in terms of the project and a wider economic benefit.

“The North West is the only region to have achieved that. It’s given us a real first mover advantage.”

Cllr Joe Anderson, leader of Liverpool City Council, said the fund “can become a real game-changer for Merseyside”.

“It has the potential to create a fund that is both long term and sustainable. The economic conditions have made us more imaginative.”