Wednesday, April 1, 2015

FW Capital backs plans for new investment pot to help Teesside businesses


A Teesside fund manager has backed efforts to bring additional investment to the region to boost the growth of local firms.


FW Capital currently holds a £30m-plus investment pot for the North-east, managing the £20.5m Growth Plus Fund for North East Finance and the £10m Tees Valley Catalyst Fund on behalf of Tees Valley Unlimited.


While the Tees Valley Catalyst Fund was launched in 2013 and still has several million pounds of funds available, the majority of the Growth Plus money has been invested and the fund ends in December.


But TVU and the North East LEP have backed attempts to bring a new fund to the region and, while questions remain over how it will work in practice, the idea has also been supported by other parties including FW Capital.


Joanne Pratt, fund manager at FW Capital, said: “We’d definitely be interested [in managing future funds]. They create jobs and generate wealth for the local economy.


“SMEs are very important to the UK economy and there needs to be funding mechanisms in place to allow them to develop. We already have a strong exporting, manufacturing and engineering base and there are some fantastic service companies too.


We need to build on that by securing funding streams that will give businesses the tools to remain competitive.”


She said there was scope for FW Capital to grow its presence in the North-east, where it has operations in Billingham and Newcastle. It is part of Finance Wales Group, one of the UK’s largest SME investment firms with more than £400m under management.


In the last five years FW Capital has invested more than £20m in North-east firms, including almost £4m in Teesside businesses.


More than £17m has been invested from the Growth Plus Fund, as well as £3.1m from the Tees Valley Catalyst Fund, with plenty of enquiries in the pipeline.


Teesside beneficiaries of the Catalyst Fund include Process Control Equipment (PCE), which supplies industrial valves, actuators and controls for the oil, gas and petrochemical industries. The Thornaby-based firm received a £1.1m performance bond loan which helped it to secure more than £10m of new contracts.


The Tees Valley Catalyst Fund provides short-term finance for performance and warranty bonds, typically from £100,000 to £2m for up to two years. Meanwhile the Growth Plus Fund offers debt, mezzanine and equity investments between £350,000 and £1.25 million and is aimed primarily at established, revenue-earning SMEs that are targeting a step-change in growth.


* See Tuesday’s business supplement for an in-depth interview with Joanne Pratt.



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