MORE than £12m has been invested in the first few months of the new North East venture capital fund with 22 regional businesses benefiting from investments of between £50,000 and £750,000.
One fund manager is looking at investing in three potential businesses which want to relocate to the region and create dozens of new jobs.
And with a further 700 applications being considered the region’s new £125m super-fund is living up to its billing as a major job-creation driver.
The Finance for Business North East Fund (FBNEF) which was launched in January has £125m to invest in regional businesses over the next five years with the aim of helping 850 companies create 5,000 new jobs. Figures obtained by nebusiness show that the 22 companies helped so far have had total investment from the fund of £5.3m.
The public money has also helped attract £7m of private investment.
North East Finance, responsible for the management of the FBNEF, says it has so far received almost 700 applications for loans and investments.
Andrew Mitchell, chief executive of North East Finance, said: “We have been delighted with both the quantity and the quality of the applications to the fund so far
“There are lots of good businesses out there who are already benefiting from the fund and others who will shortly be benefiting from the fund.”
FBNEF has been created 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.
It is aimed at helping SMEs and start-ups across all business sectors with its six individual component funds tailored for more specific investment needs.
Duncan Lowery, senior investment manager of the IP Group which manages the North East Technology Fund has itself created four jobs after establishing an office in the region.
It has so far invested £750,000 into Newcastle-based train technology company Nomad Digital. He said: “The quality of businesses coming out of the region’s universities is very good and 20% of our inquiries are from companies outside the region. We are currently talking to three companies who want to relocate to the region, creating dozens of jobs initially and possibly hundreds of jobs after that.”
One North East chief executive, Alan Clarke, said: “One North East worked extremely hard with support of the European Investment Bank and European Commission to create this fund for the region so I am delighted the Finance for Business North East Fund has reached this milestone so quickly having launched in January.
“This fund provides the perfect platform to kick start new growth as the region moves out of recession and into economic growth. With its associated legacy funds the economic benefits of Finance for Business North East will be felt in the region for years to come.”
The first investment in April into Gateshead-based games development company Eutechnyx, which received £650,000, helped attract £5.2m from Dutch-based private equity firm Prime Technology Ventures, the cash used to create a new generation of free-to-play games which could see it double its North East workforce to 170
Source: The Journal July 23 2010
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