Wednesday, October 4, 2017

News: £400m investment fund targets growing Rotherham businesses

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A slice of the new £400m Northern Powerhouse Investment Fund (NPIF) is set to help the growth of SMEs in Rotherham and the rest of the Sheffield city region (SCR).

Based in Sheffield, the NPIF works with ten Local Enterprise Partnerships (LEPs), combined authorities and Growth Hubs, as well as local accountants, fund managers and banks, to provide a mixture of debt and equity capital to northern-based SMEs at all stages of their development. NPIF is providing funding to fund managers who will offer Microfinance, Business Loans and Equity Finance.

Acquiring Enterprise Ventures 18 months ago, Mercia Technologies PLC, has been appointed to manage more than £108m of new venture capital and loan funds through the NPIF. The recently re-branded Mercia Fund Managers is managing a £57.5m NPIF Equity fund, which will provide finance of up to £2m for businesses in Yorkshire, the Humber and Tees Valley and a £51m NPIF Debt fund, which offers loans of £100,000 to £750,000 to SMEs in Yorkshire and the Humber.

The debt finance investment in the SCR is being managed by a familiar face - Pete Sorsby, formerly of RBS, and the fund managers have a strong track record of supporting companies with high growth potential, delivering several notable successes for similar funds, including Rotherham-based Xeros plc.

Launching at the end of February 2017, following a delay due to uncertainties over Brexit, the NPIF has already supported a number of firms in the SCR. Libertine FPE Ltd is using a £500,000 investment to advance its "Linear Power Systems" technology and set up a new headquarters in the city region with product development and testing facilities. And Televideo, a Sheffield-based outside broadcasting company which is one of the UK's leading suppliers of sports programming has secured a £150,000 loan to invest in new 4K equipment.

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The Business Enterprise Fund (BEF) and Finance For Enterprise (FFE - formerly Donbac) secured the tender for providing Microfinance (£25,000 – £100,000) in Yorkshire and the Tees Valley area.

BEF and FFE provided 23 loans in three months since March 2017 using the NPIF scheme, with £1m loaned to SMEs across the region.

NPIF funding is drawn from several sources including the UK Government, the European Investment Bank, the British Business Bank and the European Regional Development Fund.

Sean Hutchinson, senior manager at British Business Bank, said: "The Yorkshire, Humber and the Tees Valley regions have been incredibly receptive to the Northern Powerhouse Investment Fund. It is very positive that Fund Managers have already seen a large number of businesses making enquiries for funding, demonstrating the strong appetite for growth."

In total, more then £10m has been invested across the Northern Powerhouse region.

Jake Berry, Northern Powerhouse Minister, said: "It's fantastic to see that so soon after we launched the Northern Powerhouse Investment Fund it's already provided £10m to support Northern businesses. The Fund is a great example of what can be achieved when the Government and businesses work together and is all part of our plan to boost the northern economy, creating more jobs and attracting investment in the region."

Keith Morgan, CEO of British Business Bank, added: "The North of England has long been a key region for innovation and economic growth in the UK. The Northern Powerhouse Investment Fund is now providing the financial backing to tap the growth potential of businesses across the North, helping both the regional and the national economy.

"Passing this £10m funding milestone in such a short space of time since launch is a fantastic achievement for the fund, our fund managers, and our partners in the 10 participating Local Enterprise Partnerships."

SCR Growth Hub website
NPIF website

Images: NPIF


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