MSIF work will go on

THE Merseyside Special Investment Fund, which invested more than £24.9m in 2008, is to continue its work with a sucessor fund.

The money invested in the nine months before the funds closed in December 2008 is a £7.3m increase on what was invested in the whole of 2007.
 
In December alone, Liverpool-based Alliance Fund Managers, which manages the fund, invested in two management buyouts – the £2m MBO of International Safety Products and the £450,000 MBO of Petlife Ventures.
 
The MSIF Funds were created through the European Regional Development Fund Objective One Programme, which finished at the end of December 2008.
 
ERDF gave the MSIF Funds £56m with the remit that they were to generate a sustainable fund model. The money has been fully invested, with Mezzanine Fund 1 and Small Firms Funds 1 and 2 making distributions from profit to all of their investors, including MSIF.

This has meant MSIF has been able to establish an unnamed successor fund, which stands at £3m and will continue to grow with further realisations. The fund has not yet started investing.

And AFM has negotiated a £4.6m extension to some existing facilities from another source, so that the Small Firms and Mezzanine Funds can provide loans to Merseyside-based businesses until March 2010.

Mark Fuller, AFM’s managing director, said: “The need for an alternative source of finance such as the MSIF Funds has been highlighted over a number of years but most clearly with the recent financial climate, which has had a direct impact on most businesses. 

“Many have struggled to secure funding for headroom or to renew current facilities and are facing acute difficulties as they encounter problems with cash flow or their cash flow planning.”
 
“The extended facility for the Small Firms and Mezzanine Funds will allow us to continue investing in quality propositions and ensure that finance is available to Merseyside businesses at a time when they need it most.”
 
MSIF’s Funds were first launched in 1996. Since then a total of £125m has been invested into 1,289 businesses.