Fund Managers announced for the £185 million North West Fund

• 6 fund managers announced for 6 funds which comprise The North West Fund
• The North West Fund (formerly the NW VCLF) to receive applications this summer
• The £185m Northwest Fund is the largest public fund of its kind in the UK
• Over £200m of private sector leverage will facilitate funding of around £400m
• 14,000 jobs to be created/safeguarded and over £700m GVA expected

Northwest Business Finance Ltd (NWBF) with support from the Northwest Regional Development Agency (NWDA) and the European Regional Development Fund (ERDF) can today (15th June 2010) announce the successful fund managers for The North West Fund.

The Northwest Fund will be a new £184.8m evergreen fund for Northwest businesses (previously known as the Venture Capital and Loan Fund or VCLF) and will be one of the largest public sector funds of its kind in Europe and the largest in the UK. Between 2010 and 2015 the Fund is expected to create/safeguard almost 14,000 jobs and improve the economic performance of England’s Northwest with an estimated GVA increase of £700m. The fund will be ready to receive applications between July and August 2010.

The North West Fund is the umbrella name for the 6 funds that will be available to businesses in the form of debt, equity and quasi-equity. These funds will be managed by 6 fund managers under contract with NWBF. NWBF has been established to oversee the delivery of the Fund, under the Joint European Resources for Micro to Medium Enterprises Initiative (JEREMIE) in the Northwest.

Initially, £170m of The North West Fund will be allocated to the 6 Fund Managers following a 10-day standstill period*. The Fund Managers then have a mandate to invest their allocation into the specific product or sector they manage, between July 2010 and December 2015. The £15m remaining will be available for further allocation and investment through to the end of 2015.  Such further allocations will be made as investment needs become more apparent.
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Four out of the six proposed fund managers will be setting up bases in the Northwest for the first time as a result of their appointment by The North West Fund, which in turn will create new jobs and bring in new expertise to the region. The 6 funds and successful fund managers to be appointed following standstill are:

The North West Fund is made up of a £92.4m ERDF grant, making it the biggest ERDF project of the 2007-13 programme, and a £92.4m loan which is expected from the EIB. In addition to this funding, the 6 Fund Managers appointed, have been targeted with securing over £200m of co-investment capital from a wide range of sources including; finance angels, banks, pension funds, venture capital, private equity investors, and other private funds.  It is expected that this initiative will generate total funding in excess of £400m.

Mark Prisk, Minister for Business, said:
"I welcome this investment in the North West, which will provide an important boost for the region’s economy. In these difficult times, focusing support on the sectors that are able to create jobs and opportunities is vital for stimulating growth and getting our regions on track for recovery.  It is one of Government's key priorities to ensure that this Northwest Fund and all other national and regional provision in future will become part of a strong, single and coherent offer of finance and investment for dynamic and growing businesses."

In total, the appointed fund managers will operate 13 offices across the Northwest and, at peak, are expected to employ 48 (FTE) professional staff based in the region focused on deploying and managing The North West Fund. 

The NWDA has led the development and creation of The North West Fund from drawing-board to launch and will continue to support it until 2015. The combination of the Agency’s expertise and knowledge has delivered a significant evergreen fund which will help hundreds of businesses to grow.

Robert Hough, Chairman of Northwest Regional Development Agency (NWDA), said:
“The NWDA has been working hard with various bodies in the UK and Europe to secure this vital fund for the Northwest.  It has taken longer than originally anticipated, but it has certainly been worth the wait. Next month Northwest businesses will have access to one of the largest support funds of its kind in Europe. It is an important initiative that will leverage hundreds of millions of pounds of private sector investment and, as an evergreen fund, will benefit businesses in our region for many years to come.”

Andy Leach, Chief Executive Officer of NWBF said:
“I am delighted that, after a robust procurement and selection process, we are now able to announce the appointment of the fund managers who will be delivering The North West Fund across the region.  The fund managers we have appointed are a combination of established regional players and new entrants to the region, bringing experience and expertise, especially in our chosen priority sectors”.

Lord Daresbury, Chairman of NWBF, said:
“The opportunity that The North West Fund provides to create an enduring legacy for the Northwest - both in financial terms and through the skills, jobs and businesses it will bring to, support or create in the region - is truly exciting. Given the current economic climate and the difficulties that SMEs are experiencing in securing the finance they need, it is also especially timely.”

Liz Meek, Chair of the ERDF Programme Monitoring Committee, said:
“The appointment of fund managers is good news for businesses in the region which will benefit from their expertise in key areas and also from the access they provide to finance in a testing economic climate.”
Each of the 6 funds have been designed specifically to support businesses in the Northwest:
Development Capital:
Expansion Capital for SMEs to provide flexible equity and loan packages to support weaknesses in the market and to invest alongside other sources of private capital in the Northwest market. Typical expansion capital structures can include equity, quasi-equity (mezzanine) capital and loan support. This fund will have a broad sector range, outside those targeted by the specific priority sector funds, but with an emphasis and focus on the regional economic priority sectors, including technology.

Business Loan:
Loans between £50,000 to £250,000 will be available to SMEs for growth businesses with actual or potential revenue streams, but whose investment and funding needs are not fully met by the banking sector, including the Enterprise Finance Guarantee Scheme. In general the loan terms will require security, including, at the Fund Manager’s discretion, a degree of personal security from the owners of the SME.

Venture Capital:   
Early Stage Finance for SMEs across the broad range of new businesses covering proof of concept, pre-start, start-up, seed capital, gap venture finance and venture capital funding, including follow-on investments. This fund will have a broad sector range, outside those targeted by the specific priority sector funds, but with an emphasis and focus on the regional economic priority sectors, including technology.

Priority Sector Funds - Biomedical; Energy & Environmental; Digital & Creative:
Priority sectors, which often require specialist investment manager skills, are extremely important to the delivery of the Northwest Regional Economic Strategy and growth in the region’s economy. These three priority sectors have been selected for focused investment, given the skills and expertise that already exist in the region and the growth that they are expected to exhibit over the next few years.  As well as supporting existing businesses and individuals in these sectors within the region, it is expected that the availability of funding in the Northwest for these sectors will stimulate many inward investment opportunities for The North West Fund.  These Priority Sector Funds will provide both venture capital and development capital investment.

The North West Fund will officially go live and will be ready to take applications between July and August 2010. An event to mark the official launch of The North West Fund will take place in September.