Finance Wales' Expertise Sought for English Region's Investments; Move to Help Expand Fund's Profile in UK
Byline: Sin Barry
FINANCE Wales is moving into England.
The Welsh Assembly Government investment bank subsidiary has been named as a preferred supplier to manage a new pounds 20m investment fund in the north-east of England following a competitive tendering process Although not formally signed off, Finance Wales is shortly expected to start making investments on behalf of the fund - which forms one element of pounds 125m in European backed funding secured by regional development agency One North East.
The move is part of a strategy to expand the profile of Finance Wales into England - with a view to potentially being able to raise a future fund solely sourced from financial institutions.
Finance Wales hopes a strong track record on returns from its own investments into Welsh companies, coupled with a well-managed fund in the North East (and potentially in other English regions too), will help secure institutional backed investment for a new fund after 2014 - at which time it is unlikely to be able to draw on any further European Union backed funding Finance Wales' first two funds were backed with European Union structural funding (Objective One and Two), with match funding from Barclays.
Its latest pounds 150m fund is made up of funding (pounds 75m) from the European Investment Bank which is repayable with interest over 10 years. The EIB funding has been secured from the Joint European Resources for Micro to Medium Enterprises Initiative (Jeremie) A further pounds 60m has been sourced from the European Regional Development Fund, with Finance Wales itself making up the rest of the pounds 150m pot.
In its new fund, which was launched last year, it can make equity investments of up to pounds 2m in Wales-based companies - with the ability to make secondary investments at the same level.
Now regional development agency One North East has also secured a European backed pounds 125m fund - with a significant input from Jeremie.
Finance Wales will manage one of six elements of the funding - some pounds 20m assigned to the Growth Fund 500. A number of private fund managers have been named as preferred suppliers to manage the other funds.
Finance Wales is currently recruiting staff to manage the fund, with which intends to invest in relatively mature companies.
The fund can complete investments of between pounds 350,000 and pounds 1.25m.
Malcolm Page, One North East deputy chief executive, said: "Our Jeremie fund is the first fund of its type in England and will help underpin a new generation of high growth, small and medium-sized businesses in the region, potentially supporting more than 5,000 jobs. …