Six of the best – then more – says BGF
The £2.5bn Business Growth Fund is planning to complete at least half a dozen deals from its Midlands office in its first full year of operation, its director has told Insider. But Ian Downing, investment director at the BGF, said the fund is not yet getting enough applications from manufacturing businesses in the region.
The BGF, launched in April last year, is a £2.5bn equity investment fund backed by five of the UK’s largest banks.
The evergreen fund has been set up to take long-term minority equity stakes of £2m to 10m in businesses with turnovers of up to £100m.
Although the Midlands' office in Birmingham, set up in September 2011, has yet to announce its first deal, Downing said its first transaction was very close to completion and a number of others would hopefully be completed in quick succession.
"I think we'll make about half a dozen investments in our first full year, and I expect we'll increase that in subsequent years."
Downing said the BGF's set-up placed it apart from most equity houses working in the region, which tended to do a handful of deals each year – mainly management buyouts - for majority stakes which were retained for three to five years.
However, Downing admitted that, while the BGF was getting plenty of service companies applying for funding, not enough of the region's manufactures were considering what the fund had to offer.
