The Business Growth Fund (BFG) is looking to ramp up investments into growth-focused firms in Wales.
Last year the BGF, invested £10m into firms in Wales, including £6m into Cardiff-headquartered digital agency Kagool. With offices also in Manchester, London and New York, the equity investment is supporting its organic and acquisitive growth strategy. Shortly after the deal Kagool acquired Delete, a digital experience agency.
Since its launch in 2010 the BGF has invested £33.5m in Wales and across the 海角视频 £2.5bn into more than 335 firms. It can make equity investments of between £2m and £10m per investment deal.
Ned Dorbin, head of Wales and the south west of England for the BGF, said: “Covid-19 has placed a significant strain on many of the region’s businesses; however, we have remained determined to support those entrepreneurs and management teams showing great resilience in the face of economic uncertainty.
“Throughout 2020, BGF has continued its long-term approach, with the aim to assist the expansion of businesses in Wales at the appropriate pace and pursue an exit that is timed right to be of maximum benefit to all shareholders.
"There are so many exciting companies in the region, and we predict that we will see an increase in companies that are looking for growth support.”
Mr Dorbin said his team has seen an uplift in enquiries heading into 2021, signalling further prospects for deal activity over the next 12 months.
He said opportunities are likely to arise from entrepreneurs looking to make acquisitions, enter new markets and potentially de-risk of some of their own personal investments.
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This view is supported by research carried out by Delineate on behalf of BGF which found that 83% of growth economy companies in the Wales – which have revenues between £2.5m and £100m – said they remain motivated to grow in 2021. This data also showed that 67% of companies in Wales said that the pandemic has triggered permanent changes to their business models. 58% have invested in digital infrastructure and 42% have entered new sectors.
BGF’s data also showed that Welsh companies were looking to employ more staff members in the region. 25% of Welsh respondents said they planned to hire a few new staff and 17% said they planned significant new hires – signalling that overall, there will be net gains in employment across the growth business population.
Mr Dorbin said: “We are seeing a real drive and motivation amongst growth economy businesses in Wales to get themselves in order, with many considering equity funding as a stabilising solution. BGF’s proposition as a long-term, minority equity partner is attractive to businesses looking to recapitalise, particularly if they have built up significant amounts of debt during the pandemic.
"Equity funding can allow the repayment of personal financing and accelerate growth plans, such as strategic acquisitions. BGF has the expertise and financial backing to give businesses critical advice as they look to reignite or forge ahead with growth plans this year.”
BGF is backed by Barclays, HSBC, Lloyds, NatWest and Standard Chartered, but operates as an independent company.