Pro Manchester challenges funding gap findings
PRO MANCHESTER, the lobbying group for people working in professional services, has disputed the belief that there is a funding gap for businesses looking for £2m-£10m in growth capital.
Former chairman of 3i Asia Chris Rowlands conducted a review into the state of growth capital for the previous government and found there was a lack of funding at this level.
He did not think banks or equity investors were likely to fill the gap in the near future.
However, research carried out by Pro Manchester on behalf of the Association of Greater Manchester Authorities (AGMA) and the Commission for the New Economy think tank found that some 46% of all recorded deals in the UK were for between £2m and £10m.
More than half of all deals categorised as ‘development growth capital’ took place within the £2m to £10m range, according to the report.
John Ashcroft, Pro manchester’s chief executive, said: “We challenge whether sufficient evidence is contained within the Rowlands Report to support the assertion that an equity gap exists between £2m and £10m. The data used in the Rowlands Report and much cited by policymakers is not consistent with the wider conclusion.
“Businesses and the SME sector specifically face important challenges but it’s essential that research is accurate, consistent and credible. Manchester has a vibrant corporate finance community and Manchester is probably the centre for mid-tier private equity finance in Europe. Our members do not identify with the concept of a funding gap.”
Pro Manchester’s final report into innovation and enterprise in Greater Manchester is due to be completed by mid-November. The interim report and its review of the Rowlands report can be seen at www.pro-manchester.co.uk.
