Download Invest NI Access to Finance February 2013

Invest NI
Access to Finance
February 2013
Invest NI’s Access to Finance Strategy
Growth Loan Fund (£50m)
(DEBT/MEZZ)
Small
Business
Loan Fund
(£5m) (DEBT)
Development Fund I (£30m)
(EQUITY)
Co-Fund NI (£16m)
(EQUITY)
Development Fund II (£30m)
(EQUITY)
NISPO Funds(£12m)
(EQUITY)
Deal size
Up to £250k
£500k
£2m
Provides Risk Capital funding continuum - from start-up to development capital up to £2m:
 ‘Enterprise Escalator’ - £12m NISPO funds (EQUITY) for seed and early stage LIVE
 £16m Co-investment fund (EQUITY) – based on Scottish model LIVE
 £50m Growth Loan fund (DEBT/MEZZ) initiative LIVE
 £5m Small Business Loan Fund initiative (DEBT) LIVE
 £60m (2 Funds of £30m) Development Funds (EQUITY) – up to £2m deal size – recognised equity gap
in UK – OUT TO TENDER
Funds and Fund Managers
NISPO Funds
NISPO Funds – offering an ENTERPRISE ESCALATOR and managed by E-Synergy
•
£10 million Invest NI investment
- £5 million equity – Invest Growth Fund – early stage, £50k to £250k, 5 years
investment period – private sector contributes 30% in any funding round
- £2 million equity - £1 million each for QUB and UU – seed, up to £200k investment
over a 4 years investment period
- £3 million Proof of Concept grants, non university sector and complements university
Proof of Concept scheme
•
Investment Readiness and Showcasing events
•
Currently seek an extension to Invest Growth Fund and Proof of Concept
Co-Fund NI
•
To meet the gap in VC funding continuum between NISPO and Crescent II –funded
by Invest NI; based on the Scottish Enterprise model.
•
Aims to co-invest alongside business angels and other private investors – encourage
Halo development and accelerate development of syndication. Angels / private
investors lead the deal and set the terms; must demonstrate a identifiable funding
gap of no more than 45%.
•
Co-investment not exclusive to business angels but the primary target
•
Average deal size between £250,000 and £450,000, although scope to go higher
•
£7.2 million for investment from Invest NI, over 6 years, average 8 deals per annum,
average deal co-investment £150k alongside c£200k of private investment.
•
Clarendon Fund Managers have the contract – for services, not fund management.
12 deals completed to date and pipeline healthy.
Growth Loan Fund
•
Minimum loan size of £50k with an estimated 50-60 loans per annum; typically
unsecured loans - interest rates typically 8.5% to 12% with an additional profit share
•
Target loan size of £50k-£500k to support SMEs with growth potential
•
Proposed as a 10 year project with lending over the first five years and realisation
over next five years to complete collection
•
£50m funding is in place - £25m from Invest NI and £25m from the private sector.
•
Whiterock Capital Partners - a consortium led by Braveheart Investment Group are
managing this Fund.
•
Operational from June 2012. The first loans have been made and the pipeline is
healthy.
Small Business Loan Fund
• Aim to provide loans of between £1,000 and £50,000 on a
typically unsecured basis, at 8%-16% interest rates
• At the bottom end (up to c£25k) this is largely a social
initiative – will include start-ups and social enterprises
• Some economic impacts anticipated above c£25k
• Ulster Community Investment Plc (“UCI”) has been
appointed to manage this fund
• Launched Feb 2013
Development Funds
•
Fund model approach – limited partnership with 10 year term – 5 year
investment period. Aiming to do deals in 20 companies.
•
Completes the dealflow chain given the equity gap in venture capital.
•
Deal size £450k to £2million.
•
Two funds of c. £30m each.
•
Fund Managers will be required to raise private capital alongside the
proposed £15m commitment being made by Invest NI.
•
Tender for fund management now issued – closing date mid March 2013.
Summary
•
Provides an overarching strategy for Venture Capital and Loan Funds
•
Provides a continuum of funding (£1k-£2m) for early stage and growth
companies
Further details of funds available at:
http://www.boostingbusinessni.com/jobs/access-to-finance/
Contact Details for Invest NI Corporate Finance team:
William McCulla (Director, Corporate Finance) – 02890 698697
Helen Kirkpatrick – 02890 698674
Allen Martin – 02890 698691
Sinead Magee – 02890 698678
Gillian McKenna – 02890 698677