Business Growth Fund

The Business Growth Fund (BGF) is the UK's most active investment company[1], providing growth capital for small and medium-sized enterprises in the United Kingdom and Ireland.[2]

BGF
IndustryGrowth Capital
Founded2011
Key people
Stephen Welton, Sir Nigel Rudd
Total assets£2.5bn
Number of employees
180
Websitewww.bgf.co.uk

As of May 2019, the company has invested over £2.25bn of its £2.5bn balance sheet. Notably, BGF has invested over 60% of this total in businesses headquartered outside of London and the South East of England.[3]

The company makes initial investments between £1m to £15m to support companies at various stages of their organizational life cycle. BGF has invested in start-up companies, growth-stage companies and AIM listed companies across every region and sector of the UK economy, barring financial services.[4]

BGF adopts a patient capital investment strategy, which means it takes a minority, non-controlling stake in its equity partners. The company aims to back the long-term goals set by management teams in its investments by forgoing short-term profit expectations in its portfolio.[5]

History

BGF was founded in 2011 by Barclays, HSBC, Lloyds Bank, Royal Bank of Scotland and Standard Chartered banks, in the wake of the 2008 financial crisis.[6] The investment company was established to provide small-to-medium sized businesses with financial investment, which were otherwise under-served by the traditional set of finance and private equity firms.

In 2015, BGF launched BGF Quoted, which specialises in investments in publicly listed companies. The fund makes investments between £1 million and £10 million in value, in exchange for a minority shareholding.[7]

In 2016, BGF launched BGF Ventures, which is a fund dedicated to early-stage companies with smaller revenues. The fund makes investments of between £1 million and £6 million, whilst maintaining a minority, non-controlling stake.[8]

Leadership

Stephen Welton, formerly of JP Morgan Partners, has been the CEO of BGF since 2011, the year of its inception.[9] In 2013, Stephen was appointed as an advisor to the government regarding the establishment of the British Business Bank, and, in 2017, he was invited to join the Industry Panel for the UK Government’s Patient Capital Review.[10]

Patient Capital

BGF provides patient capital funds to organisations at all stages of their growth cycle. This long-term approach to investment empowers management teams to execute long-term growth plans and maximise returns in the long-term.[11]

The UK Government has identified the need for a greater supply of patient capital, which is being addressed through the Patient Capital Review, and consultation ‘Financing Growth in Innovative Firms’.[12]

Locations

BGF has 16 offices across the United Kingdom. Its offices are located in London, Bristol, Reading, Cardiff, Milton Keynes, Birmingham, Nottingham, Manchester, Leeds, Newcastle, Edinburgh, Aberdeen, Northern Ireland and Dublin.[13]

BGF is also the largest source of patient capital dedicated to small and medium-sized companies based in Ireland. The organisation has up to €250 million to invest and is backed by the Ireland Strategic Investment Fund (ISIF), AIB, Bank of Ireland and BGF’s existing shareholders. The company’s Irish operations are based in Dublin.[14]

Investment Portfolio

BGF has invested in more than 300nsmall and medium-sized enterprises since 2011, investing in a diverse portfolio of early-stage, growth stage and listed businesses.[15]

In 2017, BGF was the most active funder of UK scaleups, completing twice as many deals as the next most active funder.[16]

References
  1. "Beauhurst Scaleup Index 2017". Beauhurst. Retrieved 2 February 2018.
  2. "About Us - BGF". Retrieved 2 February 2018.
  3. "Business Growth Fund reaches £1bn milestone | Growing Business". Startups.co.uk: Starting a business advice and business ideas. Retrieved 2 February 2018.
  4. "Business Growth Fund unlocks financing for small UK companies". Financial Times. May 17, 2015. Retrieved 2 February 2018.
  5. "BGF Homepage". BGF. Retrieved 2 February 2018.
  6. "New fund for medium-sized firms". BBC News. 19 May 2011. Retrieved 2 February 2018.
  7. "BGF Quoted: Private Company Information - Bloomberg". www.bloomberg.com. Retrieved 2 February 2018.
  8. "Tech investors are tapping into a £2.5 billion fund created by Britain's 5 biggest banks". Business Insider. Retrieved 2 February 2018.
  9. "Stephen Welton BGF". BGF. Retrieved 2 February 2018.
  10. "New advisory hires for government's business bank includes BGF chief executive Stephen Welton". Growth Business. 23 January 2013. Retrieved 2 February 2018.
  11. "Patient Capital Review - Industry Panel Response" (PDF). gov.uk. Retrieved 2 February 2018.
  12. Dakers, Marion (21 November 2016). "Treasury turns to 'patient capital' to address shortage of support for British firms". The Telegraph. Retrieved 2 February 2018.
  13. "BGF Offices". BGF. Retrieved 13 March 2019.
  14. "BGF launches new €250m investment fund for SMEs". RTE.ie. 14 November 2017. Retrieved 2 February 2018.
  15. "Business Growth Fund unlocks financing for small UK companies". Financial Times. 17 May 2015. Retrieved 2 February 2018.
  16. "The Scaleup Index 2017: Beauhurst & The ScaleUp Institute present data". Beauhurst. 14 November 2017. Retrieved 2 February 2018.
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