Stephen Welton, the chief executive of the Business Growth Fund, has told the Daily Telegraph that he expects the Business Growth Fund’s core market to be firms with sales between £5m and £50m.
The Business Growth Fund was set up by Britain’s top five banks to invest £2.5bn in businesses with a £10m to £100m turnover. The Business Growth Fund was given a mandate to invest between £2m and £10m per deal, with the fund taking an equity stake of between 10 and 50 per cent, as well as taking a seat on each company’s board.
However, by only investing in businesses with a minimum £10m turnover, this would effectively exclude 97 per cent British SMEs.
Its chief executive Stephen Welton now says he expects the fund to target businesses with sales of between £5m and £50m.
He told the Daily Telegraph: “The investment case drives us, not turnover. If we rigidly applied a £10m cut-off in Scotland and Wales, you’d exclude many, many businesses.
A company turning over £10m is of a size where it’s suitable to take on a partner but it might not be a very interesting company. A company turning over less that has grown quickly and has a good management team, we will look at.
This will be seen as a positive step by the Business Growth Fund. Lowering its qualifying criterion to £5m will significantly increase the number of businesses able to apply.