• The North West Fund is open and ready to receive applications
• The £185m North West Fund is the largest public fund of its kind in the UK
• Over £200m of private sector leverage will facilitate funding of around £400m
• 14,000 jobs to be created/safeguarded and over £700m GVA expected

North West Business Finance Ltd (NWBF) with support from the Northwest Regional Development Agency (NWDA) the European Regional Development Fund (ERDF) and the European Investment Bank is today (20th December 2010) ready to make investments from The North West Fund.

The North West Fund is a new £185m evergreen fund for Northwest businesses (previously known as the Venture Capital and Loan Fund or VCLF) and is one of the largest public sector funds of its kind in Europe and the largest in the UK. Between 2010 and 2015 the Fund is expected to create/safeguard almost 14,000 jobs and improve the economic performance of England’s Northwest with an estimated GVA increase of £700m.

The North West Fund is the umbrella name for the 6 funds that are now available to Northwest businesses in the form of debt, equity and quasi-equity. These funds are managed by 6 fund managers under contract with NWBF. NWBF oversees the delivery of the Fund, under the European Investment Bank’s Joint European Resources for Micro to Medium Enterprises (JEREMIE) Initiative, in England’s Northwest.

Initially, £170m of The North West Fund will be allocated to the 6 Fund Managers, The Fund Managers then have a mandate to invest their allocation into the specific product or sector they manage, before 31st December 2015. The £15m remaining will be available for further allocation and investment through to the end of 2015. Such further allocations will be made as investment needs become more apparent.

The 6 funds and fund managers are

:

+ Development Capital (£45m) YFM Private Equity
+ Business Loan (£35m) FW Capital Ltd
+ Venture Capital (£30m) Enterprise Ventures Ltd
+ Biomedical (£25m) Spark Impact Ltd
+ Energy & Environmental (£20m) CT Investment Partners LLP
+ Digital & Creative (£15m) AXM Venture Capital Ltd

Total £170m

The North West Fund is made up of a £92.4m ERDF grant, making it the biggest ERDF project of the 2007-13 programme, and a £92.4m loan from the EIB. In addition to this funding, the 6 Fund Managers appointed, have been targeted with securing over £200m of co-investment capital from a wide range of sources including; finance angels, banks, pension funds, venture capital, private equity investors, and other private funds. It is expected that this initiative will generate total funding in excess of £400m.

In total, the fund managers will operate 13 offices across the Northwest and, at peak, are expected to employ 48 (FTE) professional staff based in the region focused on deploying and managing The North West Fund.

Andy Leach, Chief Executive Officer of NWBF said:

“I am delighted that I can, at last, confirm that The North West Fund is open for business. Whilst it has taken longer than expected to establish, I believe that The North West Fund is now in a position to provide investment capital to a range of businesses across the region at a critical time. This funding will allow these businesses to deliver their own growth plans in, what continue to be, challenging economic times when the availability of alternative funding remains tight.

Having worked closely with our six Fund Managers over recent months, I am confident that they have the requisite expertise and understanding of the region and their targeted sectors, to ensure that The North West Fund delivers an enduring legacy.”

Over the past 2 years the NWDA has led the development and creation of The North West Fund from drawing-board to launch and will continue to support it until the closure of the Agency in March 2012.

Robert Hough, Chairman of the NWDA, said:

“The combination of the Agency’s expertise and knowledge has delivered a significant evergreen fund which will help hundreds of businesses to grow and is one of the major legacy projects the Agency is leaving for the region.

The NWDA has worked extremely hard on this complex project over many months with various bodies in the UK and Europe to secure this vital fund for the Northwest. The North West Fund is an important initiative that will leverage hundreds of millions of pounds of private sector investment and, as an evergreen fund, will benefit businesses in our region for many years to come.”

Simon Brooks, European Investment Bank Vice President responsible for the United Kingdom, said:

“The European Investment Bank is pleased to support this flagship SME finance initiative to benefit companies across the North West. Supporting small and medium sized companies is a key priority for the EIB and the Jeremie initiative is one of the pillars for this role in the UK.”

Liz Meek, Chair of the ERDF Programme Monitoring Committee, said:

“It’s really important that business has access to this kind of support and I’m delighted that The Fund is now up and running. Along with initiatives like the Regional Growth Fund, The North West Fund will give the private sector, and especially small and growing businesses, the help it needs at a time when help is needed most.”

Business Minister, Mark Prisk said:

“It’s great news that The North West Fund is now open for business and ready to start investing. Along with the Government’s £1.4bn Regional Growth Fund and other economic development initiatives, this fund will play an important role in boosting the prosperity of local businesses; creating new private sector jobs and driving economic growth in communities across the North West.”

The North West Fund is now live and applications can be made on-line at www.thenorthwestfund.co.uk . An event to mark the official launch of The North West Fund will take place in the New Year.

NWBF would like to thank legal advisors Mace & Jones, who acted for them in the establishment of The North West Fund.

ENDS

Notes to Editors:

The North West Fund - Each of the 6 funds have been designed specifically to support businesses in the Northwest:

Development Capital:

Expansion Capital for SMEs to provide flexible equity and loan packages to support weaknesses in the market and to invest alongside other sources of private capital in the Northwest market. Typical expansion capital structures can include equity, quasi-equity (mezzanine) capital and loan support. This fund will have a broad sector range, outside those targeted by the specific priority sector funds, but with an emphasis and focus on the regional economic priority sectors, including technology.

Business Loan:

Loans between £50,000 to £250,000 will be available to SMEs for growth businesses with actual or potential revenue streams, but whose investment and funding needs are not fully met by the banking sector, including the Enterprise Finance Guarantee Scheme. In general the loan terms will require security, including potentially, at the Fund Manager’s discretion, a degree of personal security from the owners of the SME.

Venture Capital:

Early Stage Finance for SMEs across the broad range of new businesses covering proof of concept, pre-start, start-up, seed capital, gap venture finance and venture capital funding, including follow-on investments. This fund will have a broad sector range, outside those targeted by the specific priority sector funds, but with an emphasis and focus on the regional economic priority sectors, including technology.

Priority Sector Funds - Biomedical; Energy & Environmental; Digital & Creative:

Priority sectors, which often require specialist investment manager skills, are extremely important to the delivery of the Northwest Regional Economic Strategy and growth in the region’s economy. These three priority sectors have been selected for focused investment, given the skills and expertise that already exist in the region and the growth that they are expected to exhibit over the next few years. As well as supporting existing businesses and individuals in these sectors within the region, it is expected that the availability of funding in the Northwest for these sectors will stimulate many inward investment opportunities for The North West Fund. These Priority Sector Funds will provide both venture capital and development capital investment.

The North West Fund – structure:

NWBF – The new private, not for profit, company, established to oversee the delivery of The North West Fund, under the Joint European Resources for Micro to Medium Enterprises Initiative (JEREMIE) in the Northwest.

NWBF Chairman - Lord Daresbury is the Chairman of NWBF Ltd. Peter Daresbury is Chairman of several companies including, Aim listed Nasstar PLC, Stellar Diamonds PLC, Mallett PLC and Aintree Racecourse.

NWBF Board - The board for NWBF is made up of senior and experienced figures from across the professional services sector across the region and includes:

• Peter Daresbury, Chairman
• John McGuire, Former MD of the Corporate Banking Division, for Royal Bank of
Scotland Group
• Michael Prince, Former Corporate Partner for DLA Piper
• Clive Brook, Former Corporate Finance Partner at PKF
• David Read, Head of Business Finance, NWDA

NWBF Investment Advisory Panel - NWBF has an experienced independent Investment Advisory Panel, whose role is to provide advice from time to time, to the NWBF Board, and includes:

• John McGuire (chairman)
• John Nicholson
• Clive Brook
• David Read
• Andy Leach
• Brenda Smith
• Anthea Harrison
• Hazel Moore
• Andrew Graham

NWBF Chief Executive Officer - Andy Leach, has 24 years experience in the Private Equity market, latterly as Portfolio Director with LDC in the Northwest, the leading UK regional mid-market private equity house and part of the Lloyds Banking Group.

European structure, JEREMIE:

The JEREMIE initiative offers EU Member States, through their national or regional Managing Authorities, the opportunity to use part of their European Union (EU) Structural Funds to finance small and medium-sized enterprises (SMEs) by means of equity, loans or guarantees, through a revolving umbrella fund. The initiative was developed by the European Commission (EC) and the European Investment Fund (EIF), which is part of the European Investment Bank (EIB) Group.

JEREMIE provides for a range of debt and equity financial tools to obtain the most appropriate allocation of funds according to national, regional or local requirements.

The North West Fund is funded by a European Regional Development Fund grant under the 2007-13 programme and is matched equally by private sector loan funding. The North West (JEREMIE) Fund will run for an initial investment period up to the end of December 2015.

ERDF in the Northwest:

The European Regional Development Fund (ERDF) is making a real difference to people and businesses in the Northwest. With €755 million to invest between 2007 and 2013, ERDF is enhancing the competitiveness of the region’s economy by supporting growth in enterprise and employment.

ERDF in the Northwest is managed by the Northwest Regional Development Agency (NWDA).

For further information please visit www.erdfnw.co.uk

The European Investment Bank:

The European Investment Bank is the European Union’s long-term financing institution and, provides long-term finance for capital projects promoting European economic objectives. The EIB made its first loan in the UK in 1973 and since then has lent around €75bn for investment in the UK economy. In the years from 2004 to 2009, the European Investment Bank financed investment in the UK totalled some € 23.5bn - GBP 17.5 billion.

The Northwest Regional Development Agency (NWDA):

The NWDA works to deliver economic success in England’s Northwest by building the competitiveness of its businesses, people and places. Utilising our technical expertise and strategic influence, we help the region’s 250,000+ businesses to develop and grow, as well as supporting international trade and encouraging inward investment.

For further information please contact Neil Roscoe, Senior Press Officer on 01925 400232 or mobile 07980 713282 or neil.roscoe@nwda.co.uk