The Funding 50: The best places to raise growth finance in 2003
Needing cash for your business is one thing. Identifying who to speak to, getting through the door and knowing which buttons to press when you get there is quite another.
We at Growing Business strive to provide you with everything you need to raise finance. Our ‘funding 50’ is your introduction to the people who can help finance your company’s growth. Whittling down from close to 200 nominees we’ve come up with a healthy mix of investors and intermediaries. We cherry-picked the most active and the ones with cash sizzling in their pockets or an ability to access it. We asked each of the organisations on our provisional list to tell us how many deals they’d completed in the past 24months with companies like yours and how much they’d sourced or put into those deals. We also tried to get some idea of how active they are likely to be over the next year or so. The final 50, which are in no particular order, also reflect the most organised, helpful and will to make themselves known to you. You’ll note, we’re sure, a good range of investment criteria and a strong regional spread, although the bulk are inevitably London-based of course. There are always going to be unlikely omissions, but if we can’t get them to talk to us, you might find it tough too. we are eager to hear the case for those who missed out this year and want to hear the views of you, our readers. So feel free to getin touch.
Mike Henebery Gresham Trust
In the engine room of the UK mid-market, Gresham has a reputation for supporting entrepreneurs who want to do entrepreneurial deals and quite often shadows them first before taking the plunge. Deal size ranges between £5m-£75m with a preponderance for MBOs, acquisitions and expansion, preflotation funding, recapitalisations, equity release and succession planning.
Later stage funding – Deals: 5 … Total investment: £35.8m – www.greshamtrust.co.uk
Raymond Abbot Albany Ventures
Edinburgh-based Albany Ventures tries to take a collaborative approach to funding, working with growing businesses to overcome problems and help them move on to the next stage of development. Abbot says it will put £500,000-£2m into first or second round deals for technology, software and healthcare businesses.
Early stage funding – Growth funding – Deals: 10 … Total investment: £15m – www.albanyventures.co.uk
Jason Purcell First Stage Capital
Purcell’s reputation is in helping businesses who want to commercialise intellectual property in IT, communications and specialist materials raise between £2.5m-£5m to expand their businesses. Its deal last year, which saw nanomaterials company Oxonica secure £4m to take the product to market, won deal of the year at the European Investment and Partnering awards.
Corporate financier – Deals: 5 … Total investment: £13m – www.firststagecapital.co.uk
Andrew Holmes Quester
Industry veteran Holmes has been with Quester since he helped found the firm in 1984. It offers growth finance of between £750,000-£4m of equity and management support for companies at all life stages, although it does lean towards earlier stage firms. It manages around £300m for major institutional investors, leading UK universities and five quoted venture capital trusts. A specialist in ICT, healthcare and life sciences, it invested £3.7m in Anadigm, a semi-conductor company, which raised £11.5m to finance research to pioneer a world first in its industry.
Early stage funding – Growth funding – Deals: 51 … Total investment: £60m – www.quester.co.uk
John Clifford Livingstone Guarantee
They don’t come much bigger or more active than this London-based corporate finance firm which sources finance for £5m-£100m deals. Deal types range from exits and sales, through management buy-outs and buy-ins. Engineering & electronics, food, manufacturing, leisure and retail, support services, and technology and media companies fit the bill. It recently saw RAL Holdings, the UK’s largest operator of amusement arcades, through a £40m secondary buy-out.
Corporate financier – Deals: 23 … Total investment: £276m – www.livguarantee.com
Wol Kolade ISIS Equity Partners
Wol Kolade’s specialism is investments of between £2m-£20m. ISIS looks at companies with over £1m profits in business and financial services, healthcare, information technology and media. One of their most recent high profile deals was with snow and ski clothing retailer Fat Face, where ISIS replaced capital to help grow and expand the business.
Growth funding – Later stage funding – Deals: 16 … Total investment: £100m – www.isisam.com
Andy Rigby North West Equity Fund
Money’s not a problem for Cheshire based Andy Rigby – it’s getting quality opportunities. Of a £35m fund NWEF has invested just short of £2m so far in new businesses and smaller management buy-outs and buy-ins. But Rigby wants more. The investment range is from £50,000-£500,000 although in exceptional cases, £1m will be considered.
Early stage funding – Deals: 8 … Total investment: £1.9m – www.nwef.co.uk
Darryl Eales Lloyds TSB Development Capital
Eales recently took over from previous MD Michael Joseph who positioned LDC as one of the leading midmarket investors in the UK. Consistently active since 1981, LDC has invested more than £670m in 325 businesses. The cash has been spread widely with very few sector exclusions. MBOs are a particular specialism with equity slugs of £2m-£30m.
Growth funding – Later stage funding – Deals: 31 … Total investment: £190m – www.ldc.co.uk
Gary Levin Altium Capital
Gary Levin heads up the corporate finance arm of this independent investment bank which specialises in fundraising through private placements, equity and/or debt, and IPOs. It is one of the most active corporate financiers in the market with pan-European credentials. Altium was also recently voted boutique corporate broker of the year by Acquisitions Monthly magazine.
Corporate financier – Deals: 60 … Total investment: £495m – www.altiumcapital.com
Christopher Curry Piper Private Equity
Piper channels its funds largely into consumer brands in consumer markets. Retail, travel, leisure and consumer products are preferred sectors, although education, financial services and healthcare businesses, where these sectors focus on the consumer, are also possibilities. Target companies have turnovers of up to £20m and Piper’s equity investment range goes from £1m-£5m, although start-ups and turnarounds are a no-go.
Growth funding – Later stage funding – Deals: 4 … Total investment: £5m – www.piperprivateequity.com
Mark Wignall GLE Capital
Mark Wignall has made GLE Development Capital one of the first names to call for companies who need growth funding of between £500,000-£5m. The team comprises six investment professionals who will look at deals from businesses located throughout the country and is one of the few who remain active in this deal range. The firm is independent and of the £50m it has under management it has £25m to invest.
Early stage funding – Growth funding – Deals: 8 … Total investment: £11m – www.gledevelopmentcapital.co.uk
Stephen Goschalk Insinger de Beaufort
If you are looking to raise finance in the region of £2m plus then Insinger may be the corporate finance house to help. It has no sector specifics and companies which need funds for rapid expansion and development are its focus. AIM-quoted medical Maelor Plc was one that it advised raising a total of £3.5m.
Corporate financier – Deals: 18 … Total investment: £178.2m – www.insinger.com
Tim Levett Northern Venture Managers
Proving that there’s plenty of life in the market for the right management team, NVM is so active it puts others to shame. With some £140m under management Levett says there is no preference for sector or business size but that early stage development capital is a preference. With offices in Newcastle, Edinburgh and Reading, it is a good option for companies who want to look locally for their funding.
Early stage funding – Growth funding – Deals: 63 … Total investment: £42.2m – www.nvm.co.uk
David Giampaolo Pi Capital
Giampaolo has brought some vim and verve to the UK angel scene. His entrepreneurial approach to investment goes down well with small and medium sized businesses. And the sums Pi Capital is putting into deals backs this up. Early- to mid-stage companies of all sectors, but not start-ups, are suitable for the £1m-£3.5m of equity investments. Pi Capital also looks to provide follow-on funding for businesses as they grow.
Early stage funding – Growth funding – Deals: 7 … Total investment: £16m – www.picapital.co.uk
David Beer Beer & Partners
A driving force on the angel scene for many years, Beer & Partners has seen a slight slow-down in deal numbers in 2003 after 31 completed transactions in 2001 and 28 last year. But Beer says the signs are that strength is returning to the market and investor appetite is building up again. Beer has no sector preference, nor stage of business preference. The company will help fund businesses with between £100,000 going north up to £2m in need of equity.
Corporate financier – Deals: 47 … Total investment: £17m – www.beerandpartners.com
Gary Robins Hotbed
After little more than a year, Hotbed has established itself as one of the premier sources of equity gap investment, proving that its base of investor members have a more than healthy appetite when it comes to good deals. No sector is out of bounds and businesses at any stage in their lifecycle are considered. Typically, it puts in between £500,000-£3m of equity. Engineering business Didsbury, which turns over £7m and employs 40 staff got £1.5m from Hotbed in a £4m management buy-out. Robins says this is the shape of things to come and is continuing to build up its UK investor base.
Ealry stage funding – Growth funding – Deals: 12 … Total investment: £9m – www.hotbed.uk.com
Mark Brady Brewin Dolphin Securities
Brady heads up the corporate finance and broking team at Brewin Dolphin which aims to provide advice to smaller public and private companies on strategic transactions. Brady has extensive experience in bringing companies to the stock market from sectors as diverse as engineering and consumer finance. With offices in Scotland and the North, Brewin Dolphin is one of the leading players outside of London.
Corporate financier – Deals: 40 … Total investment: £80m – www.brewindolphin.co.uk
David Williams Sand Aire Private Equity
Sand Aire is perhaps the don of VCs specialising in family business investment. It commits between £2m- £10m of equity per investment in companies valued at £50m or less. Recent deals involved insurance, leisure, building supplies, distribution-related businesses. Construction company Buildspan was one, getting £10m for a management buy-out/buy-in
Later stage financing – Growth funding – Deals: 8 … Total investment: £40m – www.sandaire.co.uk
Ken Vere Nicoll Matrix Group Ltd
This corporate finance and private equity organisation sources funds from its own VCTs, from private investors and from institutions, specialising in getting prospectuses out to the difficult-to-reach high net worth individuals via mailshot. The corporate finance arm has a generalist focus, but particularly likes post start-ups in IT, healthcare and leisure.
Corporate fiancier – Deals: 8 … Total investment: £20m – www.matrixgroup.co.uk
Ray Hurcombe Xenos
Welsh entrepreneurs need look no further than Cardiffbased angel network Xenos, which backs deals with sums of £10,000-£250,000 and is actively recruiting investors. One investment, currently doing well, manufactures vehicle data systems for F1 test models and military vehicles.
Early stage funding – Deals: 14 … Total investment: £1.3m – www.xenos.co.uk
Gilbert Chalk Baring Private Equity
Not as high profile as other names in the sector but certainly as active, Baring specialises in funding unquoted, mid-market companies with sales turnover above £25m, in all sectors with the exception of retail. The fund invests in companies, either on a majority or minority basis.
Growth funding – Later stage funding – Deals: 13 … Total investment: £66m – www.bpep.com
Robin K Black Botts and Company
With an emphasis on the entertainment and leisure sector, this independently owned fund recently backed multiplex cinema operator Cineworld’s expansion to 30 outlets, raising turnover to £87m. Investing between £5m-£50m per deal, Botts also specialises in bigger deals for branded goods, industrial products, services and media firms.
Growth funding – Later stage funding – Deals: 5 … Total investment: £75m – www.bottscompany.com
Stephen Ross Springboard
Springboard invests between £250,000-£750,000 in start-ups, but only those set up by proven management teams who have been a CEO and made money in the sector where they are looking to develop a new business. Ross has no sector preference, but companies must have low capital requirements, so tend to be in service industry. If you need replacement capital or are undergoing shareholder restructurings you could also be in the frame. Teleconferencing company Meeting Zone (one of Growing Business’ adopted companies) is indicative of Springboard’s work into which it sunk £750,000 last year.
Early stage funding – Deals: 12 … Total investment: £7.6m – www.springboardplc.com
Philip Newborough Bridges Community Ventures
Newborough is the leading face of investment in inner city and deprived areas of the UK. One of the few in its field, Bridges invests in independently owned companies employing 250 or less, normally, but not exclusively, in inner city areas. Company turnover must be sub-£25m and the annual balance sheet total must not exceed £16.5m. In addition, 35% of employees must reside within a designated region, as should suppliers and target consumers.
Early stage funding – Growth funding – Deals: 5 … Total investment: £2.5m – www.bridgesventures.com
Simon Davies Tenon Corporate Finance
Tenon is consistently a leading corporate finance adviser to small and medium sized businesses. Davies claims no sector preference but businesses involved in food, retail and leisure, and manufacturing may get first bite because of the team’s specialism. Deals of all kinds from £5m-£50m in value are its speciality.
Corporate financier – Deals: 30 … Total investment: £255m – www.tenongroup.com
Kevin Reynolds Bridgepoint Capital
Reynolds is the head of the UK investment team in charge of continuing Bridgepoint’s 25-year track record of investing in established mid-market companies across all sectors. Bridgepoint invests £10m-75m in larger businesses
Later stage funding – Deals: 12 … Total investment: £375m – www.bridgepoint-capital.com
Graham Spooner Classic Fund Management
Launching its first fund in early 1999, Classic Fund Management specialises in equity investments of between £200,000-£1.5m in unquoted private companies. Its most active area is currently technology investment.
Early stage funding – Deals: 25 Total investment: £30m – www.classicfunds.co.uk
Stuart Paterson Scottish Equity Partners
Not only one of the major VCs north of the border, SEP is one of the most active technology investors in the UK. The portfolio includes companies specialising in cancer therapeutics to bluetooth technology. Paterson’s confidence will impress companies who need funding: he says that despite the downturn, now is a good time to invest. And with funds of over £100m he is ready to back businesses with £500,000-£5m in equity.
Early stage funding – Growth funding – Deals: 24 … Total investment: £20m – www.sep.co.uk
Kit Hunter Gordon Summit Group
Kit Hunter Gordon is another one of the few who directs funds into the sub-£1m investment sector, considering start-ups as well as growing businesses run by entrepreneurs with a track record. The firm looks to take a 20% to 49% stake in investee companies and provides management and administrative support to help their investments grow.
Early stage funding – Deals: 8 … Total investment: £3.5m – www.summit-group.co.uk
Doug Richard Library House
Library House is a research house or ‘filter’ for investors in innovation- based companies. Set-up in 2002, it is located in Cambridge and screens deals for a 64-strong investor base ranging from VC’s to banks with a combined £14.5bn in investment firepower behind them.
Corporate financier – Deals: 18 Total investment: £30m – www.libraryhouse.net
Richard Harbottle Wales Fund Managers
As the only independent VC in Wales, Harbottle’s firm backs Welsh growth companies, start-ups and early stage firms with £25,000 to £1m. WFM says, to fit the bill, a business needs to demonstrate a strong management team, potential for significant growth, a product or service with the capacity for strong sales.
Ealry stage funding – Deals: 21 … Total investment: £3m – www.wfml.co.uk
Steven Scott Penta Capital
Scott’s Glasgow-based outfit specialises in buy-outs, buy-ins and the provision of later stage development capital in the UK and Irish unquoted mid-market with a preferred investment size in the range of £3m-£15m. The focus is IT, communications and business services and leisure.
Growth funding – Deals: 7 … Total investment: £40m – www.pentacapital.com
Tony Dickin Aberdeen Murray Johnstone Private Equity
London-based Tony Dickin is one of the many UK office heads of AMJPE, another of the handful of investors that go for smaller size companies. That said it has a generalist approach looking at companies worth up to £50m.
Early stage funding – Growth funding – Deals: 47 … Total investment: £68m – www.aberdeen-asset.com
Jim Keeling Corbett Keeling
Corbett Keeling has a single focus – advising businesses who need equity investment of £1m-£20m. It has developed two specialisations: helping established businesses raise development, turnaround and replacement capital, often for buy-outs or buy-ins; and advising earlier stage and high tech businesses on raising start-up and development capital.
Corporate financier – Deals: 15 … Total investment: £40m – www.corbettkeeling.com
Pavlos St Stellakis NBGI Private Equity
A low profile belies its strength and over the past two years Pavlos St Stellakis has proven NBGI’s credentials as a leading funder of UK mid-market companies. The firm invests in larger business with equity chunks of £3.5m-£35m. A recent portfolio deal was the £9.1m expansion funding of Brownhills, the UK’s largest motorhome retailer.
Growth funding – Deals: 8 … Total investment: £35m – www.nbgiprivateequity.co.uk
Richard Lee WH Ireland
One of the oldest and most well respected corporate finance houses, WH Ireland has had a Manchester office for 150 years, but now has offices across the UK. It concentrates its attention on company listings on AIM. One was factoring company Ultimate Finance, which raised £2m when it took to the marketplace for small and medium sized businesses.
Corporate financier – Deals: 10 … Total investment: £8m – www.wh-ireland.co.uk
Bernard Fairman VCF Partners
Early stage and expansion backers VCF invest £1m- £2m in technology companies. Its current focus includes nanotechnology, digital interactive media, wireless, enterprise software and communications. Oxonica Ltd is one of its deals. A leading UK nanotechnology company, VCF Partners invested £1.9m in a mixture of debt and equity representing 19% of the company. Other investors include BASF and US specialist materials investor, NGEN.
Early stage funding – Growth funding – Deals: 12 … Total investment: £15m – www.vcf-venture-capital.co.uk
Peter Brooks Sovereign Capital
Slick private equity provider Sovereign invests £5m- £15m of equity in established businesses, who can show pre-tax profits of £1m. It likes businesses in the outsourcing, support services and facilities management, leisure, healthcare services, education/training, waste/environmental sectors who want to grow fast. It will also fund management buy-ins and buy-outs.
Growth learning – Later stage funding – Deals: 6 … Total investment: £40m – www.sovereigncapital.co.uk
Stephen Toole Solomon Hare
From its Bristol head office, Solomon Hare runs one of the region’s leading corporate finance teams for private companies and smaller quoted companies. They recently helped wetsuit firm Gul International manage its buy-out but considers flotations and other fundraising work core.
Corporate financier – Deals: 59 … Total investment: £400m – www.solomonhare.co.uk
Andrew Banks Singer & Friedlander
One of the first stops for companies planning to raise cash through flotation. Singer & Friedlander only excludes biotech from its £250,000-£1.5m investment range. Glisten is one company that came to AIM via funding in June 2002. The food manufacturing business, raised £4.8m net on its admission to AIM, of which Singer & Friedlander put in £600,000.
Growth funding – Deals: 40 … Total investment: £30m – www.singer-friedlander.com
Peter Shakeshaft Arch Angels
This Edinburgh-based angel group is a big presence in Scotland investing £50,000-£500,000 of equity in most sectors, barring retail, hotels and restaurants. Target companies tend to be early stage. Arrayjet is one in its portfolio, developing robotics for use in laboratories. It got second round funding of more than £1m of which Arch Angels put in £500,000.
Early stage funding – Deals: 14 … Total investment: £12m – www.archangelsonline.com
Rod Richards Graphite Capital
Rod Richards has cemented Graphite Capital’s reputation as one of the leading players in mid-market private equity in the UK over the past few years. It invests between £5m-£20m in most sectors, for management buy-outs and buy-ins, expansion and, replacement capital and turnarounds.
Growth funding – Later stage funding – Deals: 9 … Total investment: £296m – www.graphitecapital.com
John Snook Close Brothers Private Equity
For larger mid-market companies, Snook’s London-based team should be one of the first calls. Specialising in transaction deals between £10m-£100m, Close invests in business support services, specialist manufacturing, transport and logistics as well as leisure and tourism. An important strand of Close Brothers’ work is a focus on serial entrepreneurs who they back with a £100m fund.
Later stage funding – Deals: 11 … Total investment: £140m – www.cbpel.com
Ken Olisa Interregnum
Founded by Private equity Personality of the Year Ken Olisa, Interregnum invests its own capital in high potential technology companies. Olisa’s specialism is early stage businesses or turnarounds where the firm’s specialist sector knowledge can add value.
Early stage funding – Deals: 16 Amount Invested: £5.5m – www.interregnum.com
Andy Leach, Montagu Capital
Previously HSBC Ventures, Montagu is effectively a newcomer to the scene of small and mid-cap investments. Leach has £25m to invest in manufacturing, services and consumer sector deals requiring £1m-£10m of equity capital with transaction values ranging from £3m-£30m for growth companies.
Early stage funding – Growth funding – Later stage funding Deals: 1 … Total investment: £2m – www.montaguequity.com
Mark Asplin Jasper Corporate Finance
This small firm of corporate finance advisers specialises in mid-market deals ranging from £1m to £50m. With a good track record with the institutions and a particularly strong relationship with Lloyds TSB Venture Capital, Jasper concentrates on companies from all sectors in a 50 mile radius of Birmingham. Its three-man team has advised 150 deals over 15 year period with a particular knowledge of industries such as manufacturing, engineering, building products and support services. Start-ups and early stage businesses need not apply however.
Corporate financier – Deals: 15 … Total investment: £150m – www.jaspercf.co.uk
James Stoddart Bamboo Investments
Small but flexible is James Stoddart’s catchphrase. It invests up to £1m in equity in growth businesses across all sectors and finances both early stage and established businesses if they can demonstrate growth in their chosen market and have an entrepreneur or management team with a successful track record at the helm.
Later stage funding – Deals: 4 … Total investment: £2m – www.bamboo-investments.com
John Moulton Alchemy Partners
Taking on turnarounds or loss-making companies needs sharp judgement. This is probably why Moulton says he can tell in 20 minutes if your business is suitable for investment and if not, why not. Alchemy is one of the biggest players in public-to-private deals for mid-cap companies in the UK with an equity need of £5m-£50m.
Later stage funding – Deals: 10 … Total investment: £90m – www.alchemypartners.com
Andrew Hartley Kleinwort Capital
Andrew Hartley oversees Kleinwort Capital’s strategy of investing in companies worth £10m-£100m in healthcare, specialist manufacturing and technology. It has a track record with media companies such as Hat Trick Productions of which Kleinwort recently purchased 45%.
Later stage funding – Deals: 4 … Total investment: £32m – www.kleinwortcapital.com
Jonathan Lander Dawney Day Lander
Lander claims D2L is one of few profitable internet investment funds in the market following the dotcom boom and bust. It will focus on new businesses and turnarounds in this sector.
Early stage funding- Growth funding – Deals: 13 … Total investment: £20m – www.d2l.com