A £100 million investment chest is to be opened to profitable small and medium-sized businesses in the North East and Yorkshire over the coming year.
Independently owned investment firm, NVM Private Equity, is growing a vast pool of funds to plough into the region, following the launch of a £50m joint share offer by its three Venture Capital Trusts (VCTs).
NVM typically invests between £2m and £10m in companies looking to grow organically, acquire another business or finance a change of ownership through a management buy-out.
So far this year, its northern investment team, comprising Mauro Biagioni and Andy Leach, has invested £10m in two companies that were looking to fund management buy-outs to give them the freedom to develop further. Stockton-on-Tees based Cleveland Biotech is now set to take advantage of the growth potential in environmentally friendly biological waste management products, while the Nelson-based Buoyant Upholstery will use its investment to build on the success of its growing customer base.
NVM has had firm roots in the North – where Biagioni and Leach reside themselves – since it was first launched in Newcastle in 1984.
In the past two years, the firm has also helped existing Northern portfolio companies Wear Inns and Kitwave to make strategic acquisitions, further boosting their market presence.
Wear Inns successfully acquired a further 11 managed pubs across the North, bringing the total estate to 26 pubs, and generating a turnover of just under £12m this year.
Kitwave – a wholesaler of confectionery, soft drinks, alcohol and tobacco – acquired two complementary businesses, boosting turnover to £193m. Both firms have also substantially increased profitability since NVM’s first investment.
Biagioni, who is NVM’s investment director for the North East and Yorkshire, said: “We typically take a place on the board of the businesses we invest in, so the initial deal is often just the start.
“Our aim is to offer advice and, if necessary, incremental funding to bring the company’s growth strategy to fruition. We are in it for the long-term, so our relationship with a management team and our understanding of their business is crucial to a successful partnership.
“With our interests aligned with those of management, we will both work to maximise the potential of the business and see it grow.
“Successful investment in SMEs will only be achieved by backing businesses with the potential to deliver tangible growth.”
NVM, a generalist investor that has managed £240m of funds, seeks investment opportunities in UK businesses with the right mix of growth potential and market vision, and is differentiated by having executives living and working in regional business communities.
Biagioni added: “It is vital to be on the ground in the North East and Yorkshire business community.
“If you are based outside the region it is hard to maintain regular face-to-face contact with your investee companies and key advisor contacts.
“The North East and Yorkshire are exciting regions to invest in, and NVM is keen to use its newly raised funds to support management teams looking to take the next important step forward for their businesses.”