£75m ‘fund of funds’ launched

Government-backed fund aims to bridge financing gap

A £75m government-backed fund has been raised to help viable small businesses access growth capital in the downturn, it was announced today.

Dubbed a ‘fund of funds’, it has been distributed between two private equity firms in the UK, with the remaining sum ear-marked for co-investments with other fund managers.

The Capital for Enterprise (CFE) fund, which forms part of the government’s Real Help for Business programme announced in January, aims to help fundamentally sound small and medium-sized businesses, with real growth potential, which are currently unable to access the funding they need.

Two amounts of £30m have been committed to Octopus Investments and Aberdeen Asset Managers, to make investments in small and medium-sized businesses. The remaining £15m will form the co-investment fund managed by Capital for Enterprise Fund Managers Limited, a division of Capital for Enterprise Limited, the asset management business owned by BERR.

The Octopus Capital for Enterprise fund will invest in businesses in the South of England, Wales, East Anglia and the West Midlands, while Aberdeen will focus on businesses in the East Midlands, the North of England, Northern Ireland and Scotland.

Rory Earley, chief executive of Capital for Enterprise Fund Managers Ltd, commented: “Following an exhaustive due diligence process we are extremely pleased to be working with two of the leading VCT managers in the UK.

“We have been impressed by the rigour of both teams throughout the selection process and have every confidence these managers will identify and invest in [small businesses] with strong growth potential.”

Investors in the fund include the Department for Business, Enterprise and Regulatory Reform (BERR), HSBC, Barclays, Lloyds Banking Group and the Royal Bank of Scotland.

For more information and full eligibility requirements, call the CFE registration helpline on 0845 459 9780.

© Crimson Business Ltd. 2009


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