Big Friendly Fund Hits Its Stride

The UK’s much-vaunted £2.5bn Business Growth Fund (BGF) is certainly getting into its stride, if one measures that stride by the amount of ‘jobs’ it is creating and offices it is opening. The BGF team now totals 34 people, and is actively recruiting experienced investment professionals across the UK.

It has just opened its fourth office, in Bristol, with Grant Thornton corporate finance old boy Paul Oldham as its regional director for the South West and South Wales. The fund’s other offices are in Birmingham, London and Edinburgh. 

Stephen Welton, BGF CEO says: “While it is still early days…we are making good progress in our aim to establish a presence in key regions across the UK. This regional presence will allow us to get to know businesses well and work closely with those that we back.  Our opening in Bristol is a key milestone and we are delighted to welcome Paul as a senior member of our investment team. We look forward to finding and investing in the South West and Welsh business stars of tomorrow.”

The BGF has been established (in principle) to help fast-growing UK businesses achieve their full potential and play their part in securing Britain’s long-term economic recovery. 

The fund is looking to back established companies with growth potential across the UK.  As a general rule, these businesses will have an annual turnover of approximately £10m-£100m. Businesses that meet the BGF’s investment criteria will be offered long-term capital of around £2m to £10m, in return for a minority equity stake in the company and a seat on the board for a BGF director (doesn’t this sound suspiciously like private equity?).

The BGF says that since its launch in May 2011, it has received a number of applications from businesses, which are now under active review, and has started to make initial investment offers. This, it adds, will lead to a number of completed investments in the second half of 2011, which is in line with expectations.  

Oldham will have overall responsibility for developing relationships with businesses located in the South West of England and South Wales and for successfully executing fund investments in the region. He will also sit on the board of some of the Fund’s investee companies and is a member of the BGF’s national investment committee.

“I am very excited to be representing the BGF in the South West and South Wales,” he says. “I know, from the many years that I have spent in the region, that it is home to a wide range of growing businesses. We are looking to support those businesses that fit our criteria and have the ambition, dynamism and drive to grow - in turn creating new jobs and revitalising the local and national economy.”

“We are aiming to bring something new to the market and to broaden the financial options available to businesses. We will offer growth finance to business owners who want access to capital but do not want to sell; we will take minority stakes; and we are not under pressure to exit within a certain time frame. We are an active partner offering capital and advice (doesn't private equity do exactly that?). “

Oldman was formerly the head of LDC’s Bristol office, a South West Corporate Finance partner at Grant Thornton and a director of the Cardiff and Bristol offices of 3i, where he spent 13 years. We are reminded that during his career he has been involved in over 40 equity investments in small and medium-sized businesses.