BGF (Business Growth Fund), Britain’s leading equity investor of growth capital, has passed £500 million in committed investments to entrepreneurial businesses across the length and breadth of the UK.
Of the £500 million, £108 million has been invested in 17 businesses across the North of England.
Set up to fill a funding gap for Britain’s growing smaller and medium sized businesses, since 2011 BGF has invested in a diverse portfolio of nearly 100 companies including manufacturers, retailers, technology providers, restaurants and more.
The milestone coincides with BGF’s strongest ever quarter; BGF invested £71 million in the first three months of 2015. The underlying demand and momentum is growing with BGF now accounting for one in three of every investment made at this end of the market.
Unlike private equity firms, BGF does not seek to control companies but is a strategic partner working alongside management as a minority investor.
With deep pockets BGF is able to provide these businesses with the long-term patient capital they need to drive their ambition and unlock future potential – e.g. roll-out new sites, buy new machinery, expand into new markets, fund acquisitions and recruit new people. Nationwide, BGF committed £250 million in the last year alone – a clear signal of the growing demand for this type of support among Britain’s entrepreneurial businesses.
At the heart of BGF’s approach is a strong regional network operating from eight offices across the UK ensuring national coverage with investment professionals close to the local business communities and the companies they support.
Stephen Welton, chief executive of BGF said: “BGF is proud to work with some of Britain’s most exciting and ambitious entrepreneurs. 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. The £500m that BGF has rapidly invested would not have been provided without us. That has driven not only investment, but created thousands more jobs in our portfolio companies and unlocked tens of millions of additional debt capacity.
“BGF is operating at the very heart of the UK economy and helping to support our very own ‘Mittelstand’. I have no doubt that many of the great British companies of the future are already in our portfolio and we have only just begun.
“A new age of equity investment will drive future prosperity. BGF together with entrepreneurs across the whole of the UK is at the forefront of turning that potential into reality. The future is bright as long as entrepreneurs have the ambition to take risk and scale up their businesses; the capital is available; and the economy overall is growing driven by greater investment.
Andy Gregory, regional director – North, North Wales & Northern Ireland at BGF, said: “BGF has seen a huge surge in demand across the North of England – a clear indication of entrepreneurial drive and a supportive business environment.
“Businesses that we have already backed are growing quickly, gaining market share and demonstrating that they are capable of competing on a national and international stage, given the right backing and support. However, we know that there are many more companies out there – from a wide range of sectors – which can benefit from the type of support we provide.”
Alongside investment BGF also provides portfolio businesses with practical and strategic support directly through the investment team and BGF’s Talent Network, comprising nearly 3,000 senior business leaders. To date, nearly 70 people from BGF’s Talent Network have been appointed by portfolio companies.
BGF portfolio businesses include:
Based in Elvington near York, York Mailing was one of BGF’s first investments in the North of England. Chris Ingram founded the business back in 1999, and since then it has grown to become one of the largest suppliers of retail flyers, media inserts and quality catalogues in the UK.
“We have grown our business organically and through strategic acquisitions”, said Chris. “Any expansion programme requires a level of financial flexibility and we needed a partner who could support us in this effort by providing not only the requisite growth capital, but who would work alongside us as a partner over the long term.”
BGF’s £10m investment in York Mailing provided the financial means for targeted acquisitions in the sector – the business bought The LetterShop Group and Go Direct Marketing, both based in Leeds – alongside the purchase of new state of the art printing presses.
Jon Wright – a former professional rugby player – is the chief executive of Xercise4Less, a chain of budget gyms with branches throughout the UK and headquartered in Leeds.
“People say you must be a visionary, going into the budget health market, but not really,” says Jon.
The chain’s first few outlets were unsuccessful, Mr Wright admitted, mainly because they were too similar to conventional gyms. The company has switched to larger sites, providing more equipment and having lower prices, which are partly achieved by not having swimming pools or saunas.
Today, Xercise4Less has 24 outlets and more than 180,000 members, with plans to grow to 100 sites over the next five years. In January 2015, the business secured its third round of funding from BGF, taking the total invested to £12m.