Hundreds of jobs could be created in the North East as firms from across the country are being lured to the region by a pioneering new business growth fund.
Nearly 100 companies from outside the region have applied for money from the £125m venture capital fund and said they would move to the North East if their bid was successful.
The Finance for Business North East Fund (FBNEF) was set up in January with the aim of helping around 850 companies create 5,000 jobs in this region over the new five years. It is the first such fund in the country.
So far North East Finance, which is co-ordinating investments through FBNEF’s six venture capital funds, say there have been over 500 enquiries – of which around a fifth are from firms looking to relocate to the region. Andrew Mitchell, chief executive of North East Finance, said: “This development has the potential to be hugely beneficial to the region. The message is getting through across the UK that the North East is prepared to support growing and start-up businesses.
“Clearly in the past we have suffered from not having the venture capital funds available to support businesses but the new money has changed that perception.
“This is not about encouraging companies to come to the region so they can get funding. We are talking about companies which can establish a clear business case for investment from one of the funds, and then show their willingness to relocate to the North East.”
Newcastle-based North Star Equity Investors is managing two of the six funds and it says it has received a large number of enquiries from firms outside the region.
Its chief executive Marion Bernard said: “We are receiving enquiries from across the UK and internationally and this has major potential benefits for the region.
“If we can attract high quality global companies to set up in the region we may be able to help create a cluster of similar businesses around one business type leading to the development of global centres of expertise in the North East.”
Last year North Star invested £350,000 into Windsor-based retail price comparison website Cogenta Systems which led it to open a Newcastle base which will be a platform for its European expansion.
Barrie Hensby, chief executive at Newcastle-based NEL Fund Managers which runs another FBNEF fund, said: “Such outside interest clearly underpins the view of North East England as a region in which companies can see themselves thriving, and backs up the premise of the wider FBNEF scheme of enhancing the regional economy in a sustainable, long-term way.”
FBDNEF, originally named Jeremie, is funded with £62.5m from the European Investment Bank, £44.25m from the European Regional Development Fund 2007-2013, and £18.25m from regional development agency One North East.
Malcolm Page, One North East deputy chief executive, last night hailed the level of interest.
“The speed and reach of modern communications means that news of FBNEF has generated significant interest not just across the region but the UK as well,” he said. “It is inevitable that companies from outside the North East will express an interest in it – just as companies from across the UK have in the past gravitated towards venture capital funds delivered in London and south east England.”
He added: “The fund is solely focused on supporting North East businesses – we are primed to help up to 850 regional firms over the next five years which will spearhead new economic growth.”
Source: The Journal, May 19 2010
Post new comment