Midlands Engine fund picks up pace as it reaches £65m investment mark

Patrick Magee, chief commercial officer at the British Business Bank

The £250m Midlands Engine Investment Fund (MEIF) has more than doubled the amount of cash it has invested during the last 12 months, according to new figures.

After a slow start, the fund, which invests taxpayers’ money via a syndicate of managers, has seen £64.8m invested, with an additional £36.2m of private sector leverage. This is in comparison to June 2019, when £31m of MEIF investment had been generated, with an additional £19m of private sector leverage.

Overall, the fund says it has  created 629 jobs after investing in 257 Midlands businesses.

The new data has been released as part of an Early Assessment Report which charts the Midlands Engine Investment Fund’s progress between August 2017 and September 2019. The report was carried out by economic researchers SQW, supported by the Centre for Enterprise and Economic Development Research at Middlesex University, Belmana and BMG Research.

The report has found that the reasons for setting up the MEIF remain “robust and highly relevant”, spotlighting its “impact in improving the delivery of equity finance” in the Midlands after supporting 20% of all equity deals in the region.

A spokesperson from the Midlands Engine Investment Fund told TheBusinessDesk.com: “As of end of April 2020, the Midlands Engine Investment Fund has supported 257 Midlands businesses. This has generated £64.8m of MEIF investment, with an additional £36.2 million of private sector leverage.

“The Midlands Engine Investment Fund is committed to improving access to finance for the region’s small businesses. The Fund continues to deliver on this mission with this Early Assessment Report finding that the MEIF is ahead of target. We are building on this progress and in January 2020 made £40 million of debt finance available through a newly appointed seventh fund manager, The FSE Group.”

The MEIF has seven fund managers, each of which is responsible for different funds:

Name of fund manager Type of fund Area covered Fund total
BCRS Business Loans Small Business Loans £25k – £150k West Midlands £17.5m
First Enterprise Small Business Loans £25k – £150k East & South East Midlands £12.5m
Maven Capital Debt Finance £100k – £1.5m East & South East Midlands £40m
Maven Capital Debt Finance £100k – £1.5m West Midlands £50m
The FSE Group Debt Finance £100k – £1.5m East & South East Midlands & West Midlands £42m
Foresight Group Equity Finance £50k – £2m East and South East Midlands £34.5m
Midven Equity Finance £50k – £2m West Midlands £34.5m
Mercia Proof of Concept – up to £750k The Midlands £23m

Patrick Magee, chief commercial officer at the British Business Bank, said:“The last few months have not been easy for small businesses in the UK. This includes the Midlands, where the British Business Bank has already identified a gap in the provision of SME finance. This new report, however, reveals that through the MEIF we are making a positive difference, with the region’s businesses accessing investment to develop innovative products, hire and upskill staff, and most importantly grow.

“The MEIF is key to driving forward the Midlands Engine economy. We are committed to building on the Fund’s progress and sustaining strong levels of support; the Bank is also operating a range of other initiatives to enable businesses to access finance at this time.”

Jon Corbett, chair of the Midlands Engine Investment Fund’s Strategic Oversight Board, said: “Through our seven fund managers, a strong network of LEPs and intermediaries, we continue to foster a real sense of regional collaboration. This has been pivotal to the impact the Fund has made across the Midlands, it will continue to play an important role as the MEIF remains very much open for investment during these unprecedented times.”

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