State Backing For New €250m SME Fund

14 Nov 2017 | 09.49 am

State Backing For New €250m SME Fund

UK-based BGF is looking to invest in Irish SMEs

14 Nov 2017 | 09.49 am

UK venture capital firm Business Growth Fund (BGF) has announced details of a new €250m growth capital fund slated for investment in Irish SMEs. The fund is being backed by the Ireland Strategic Investment Fund, AIB, Bank of Ireland and BGF shareholders.

BGF said that the fund will be run by a dedicated BGF team based on Dublin’s Merrion Square. Leo Casey, former director and board member with IBI Corporate Finance, will lead the team, which also includes David Gammie, Joe Higgins and Maedhbh O’Driscoll. Further additions to the team are expected in 2018.

BGF provides initial investments of between €2m and €10m in return for a minority stake, with additional funding to investee companies as needed. It explained that the businesses it backs typically turn over between €5m and €100m a year.

Set up in 2011, BGF is one of the UK’s most active investors in growing businesses and has invested in nearly 200 British companies from a range of sectors. Stephen Welton, CEO of the firm, said that BGE brings knowledge, resources and patience to its investees — as well as cash.

“So far, this approach has achieved phenomenal results and we can’t wait to bring this model to Ireland’s immensely exciting entrepreneurial landscape,” he added.

Commenting on the new fund, Leo Casey said that there are many businesses across Ireland that can benefit from the type of long-term capital that BGF provides. “Over the past 20 years, I have worked with many diverse companies here – from family-run firms to high-tech innovators and professional services companies – and many share the same aspirations to grow their company without losing control,” Casey continued.

Eugene O’Callaghan, director of ISIF, described BGF’s funding as “patient equity”. “It will address a significant gap in the funding landscape for Irish SMEs. Judging by BGF’s success in the UK, we expect that it will attract significant interest from Irish entrepreneurs and family businesses,” he said.

BGF is a standalone company with capital of up to £2.5bn and is backed by five of the UK’s main banking groups: Barclays, HSBC, Lloyds, RBS and Standard Chartered. Earlier this year, BGF invested in Waterford-based whiskey producer Renegade Spirits Ireland. It has also invested in Escher Group and in two Derry-headquartered businesses.

 

Photo: Leo Casey (left) and Stephen Welton

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