First established off the back of an inter-bank task force headed up by HSBC, the Business Growth Fund represents a £2.5bn pool of capital backed by Barclays, Lloyds, RBS, Standard Chartered and Lloyds.
Its remit upon foundation was to invest in privately-owned businesses through deals ranging between £2m and £10m. This was then expanded upon to cover smaller deals through its BGF Ventures division and an arm supporting listed businesses in need of a capital injection.
The deal which sees the Business Growth Fund move beyond the £1bn mark involves Coppergreen Developments, a holiday park operator based in Sheffield that secured £11m from the fund.
To date, the Business Growth Fund has added in excess of 150 companies to its portfolio. Notable investments include Unruly, which was backed early in the fund’s lifetime and has subsequently been sold to News Corp for £114m, well-known children’s luggage brand Trunki and fitness chain Gymbox.
Commenting on the landmark, Stephen Welton, CEO of the Business Growth Fund and former partner at CCMP Capital, said that the firm had only “just scratched the surface”.
Walton, who is also a member of the Magic Circle, added: “While growing businesses will be affected in different ways and to varying degrees during the Brexit negotiations and beyond, our long-term approach means that we have no intention of slowing down our new activity or support for the companies we back.
“Next year is set to be an even bigger one for the Business Growth Fund and I am as excited now as I was in 2011 about the future, the businesses we support and the UK’s entrepreneurial climate.”
Speaking less than six months after the Business Growth Fund had made its first investment, Welton said that the success of the firm would gauged on whether it was around in ten years time. He also said that it needed to be making 30-40 investments per year on a “sustainable basis” and that investment teams needed to be “plugged into the local community”.
Five years later, the Business Growth Fund has nine regional offices and latest figures show 42 deals were completed in the last 12 months. Since it began investing, the fund has realised seven investments
According to statistics, around £700m of the £1bn allocated has been invested outside of London and the South East of England. The North of England has secured £215m, the Midlands £186m, the South West of England £150m and Scotland £127m.
It moved beyond the £500m investment mark in May 2015, having seen half of that amount committed in the 12 months previous.
Speaking then, Welton said: When BGF launched in 2011, smaller and mid-sized companies were largely overlooked by equity investors, access to long-term capital was scarce, and the perception was that demand was non-existent. That was completely wrong and we have seen dramatic change over the last three years.”
June 2015 saw the creation of BGF Ventures, when the firm recruited venture capital investor Rory Stirling, ex-LOVEFiLM CEO Simon Calver and Firefly Tonics Harry Briggs to lead the division. The venture capital arm now looks after a £200m pot of capital and has backed the likes of Gousto, NewVoiceMedia and ROLI.
The Business Growth Fund portfolio of companies collectively employs 25,000 people, which would make it Britain’s eight-largest private business employer.
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