Business interview: Andy Gregory of Business Growth Fund

BGF's regional director for the North, North West and Northern Ireland describes the growing firm's unique offering for SMEs.

BGF's regional director for the North, North West and Northern Ireland, Andy Gregory
BGF's regional director for the North, North West and Northern Ireland, Andy Gregory

As a young man, Andy Gregory dreamed of becoming a professional musician, and his prospects looked good.

A talented percussionist and pianist, he went on to study at Manchester’s Royal Northern College of Music.

“I did anticipate a career in it,” he said.

“Then I had a realisation that, although it was a good experience, turning your hobby into your career isn’t always the best thing to do.”

Instead, his work life has taken what many would regard as a radical departure, centring on business investment and, in particular, private equity.

Andy, though, reckons the move wasn’t as extreme as it first appears.

“There is a theory about both involving numbers,” he said.

“I think there’s something in that – particularly when it comes to classical music.

“But I had a broad interest in business and I had to give it go.”

It’s fair to say it was probably a good move.

After building an enviable CV in the field, Andy is now employed as Business Growth Fund’s regional director for the North, North West and Northern Ireland, helping unlock the potential of smaller and medium-sized business through growth capital investments of between £2m and £10m.

The company, which works closely with other key business organisations, was established in 2011 with £2.5bn of funding, backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered.

“It was established really to fill a gap in the market, that being to provide flexible growth capital to SMEs,” Andy explained.

“At the time, there wasn’t really much equity or business solutions linking to growth in this way.

“In particular, there was a lack of solutions for SMEs looking to grow over the long-term.”

One major point of distinction for BGF, he added, was that it was not looking to compete on the larger equity market or to carry out MBOs.

“We only ever take a minority stake in the companies we invest in,” Andy said.

“The big difference is really that what we can offer is long-term in nature.

“We can invest for up to 10 years, or maybe more, so we’re giving enterprises a long-term flexible equity solution that enables them to commit to growth plans and to expand while still being in control of their businesses.”

BGF employs 104 people nationally, and, working through offices in Leeds and Manchester, Andy is responsible for a Northern team of eight advisers and three support staff.

Those numbers are set to grow as the business establishes itself more firmly in the North, with a series of recent investments in the North East helping spread the word about its services.

Wear Inns, for example, received £10m of funding to help it acquire further pubs, while the Alnwick-based housebuilder Cussins received a £5m investment – supplemented by a £7m debt facility from Lloyds – to support the purchase of further sites for development.

Hartlepool’s J&B Recycling, then, received £7.5m, and, in February, Chemoxy, on Teesside, received £10m to help it expand its capacity.

“I would say we’re probably seeing a disproportionate volume of activity coming from the North East,” said Andy, who believes it is hugely important for investors to be “on the ground” working directly with businesses and advisers as much as possible.

“That does suggest the region is relatively confident in terms of growth prospects and looking for capital.

“It does seem to be in good health and there is obviously a high level of ambition. We’re very keen to support such companies.”

Typically, he says, businesses will come to BGF to support acquisitions or expansion.

Some, though, simply want to build a strong balance sheet before committing to a growth strategy, while others require more working capital.

BGF, meanwhile, will look at the quality of a company’s management and, of course, its prospects for growth in the longer term.

“We are very focused on helping the businesses we invest in, in a number of ways,” Andy said.

“In those businesses, for example, one of the team would take a non-executive board seat.

“We also look to help the companies appoint a non-executive chairman.

“We have lots of contacts – people in the industry who have maybe been CEOs in the past – and we see massive value in being able to attract high quality people to the post.”

Andy, who is originally from Dunblane in Scotland, speaks with authority on such issues, his career having allowed to him to get to grips with the business world from every conceivable angle.

After undertaking a degree in economics, he realised a chartered accountancy qualification would put him on a solid footing and, joining Arthur Anderson, spent several years in audit before moving into corporate finance.

“It was a small team, but there was quite a strong culture there,” he recalled.

“I had a great time. It was both a challenging and stimulating.

“But after four or five years, I knew I didn’t want to end up just trying to achieve partnership in a large accountancy firm.”

Instead, he moved on to RBS.

“They had recently set up a new division for acquisition finance.

“Again, it was a small division, but it was a very different environment.

“I was there for about three years and ended up running the North West part of it.

“We managed to establish RBS as a market leader in finance.

“It was enjoyable but ultimately I was trying to get a position in private equity.”

Hence, the move to Bridgepoint Advisers, then a fairly small business compared to what it is today, making investments of the same kind of scale as BGF.

While there, he did some work for a software business in Stockport, which at the time was trying to recruit a finance director.

“As I got to know them, they encouraged me to apply for the role myself,” he said.

“Initially I ruled it out because I had a fantastic job at Bridgepoint.

“The more I thought about it, though, the more I realised that it could be a once in a lifetime opportunity.

“So in the end I decided to join.”

At the time, the business had around 200 employees, turning over around £16m annually.

Hence, it gave Andy some significant insights into the workings of and challenges facing medium-sized enterprises.

It has also, he believes, boosted his credibility with the management among the companies he now works with, since they are aware that he can see situations from their perspective, not just BGF’s.

“But back then I wanted to get back into equity because I really enjoyed the variety of the work,” he said.

“I joined Royal Bank Development Capital, which again was investing in the range of between of £2m and £10m.

“We set up a new Manchester office, but then there was a change in strategy and they closed down all the private equity roles in the UK.”

For the next six years, he worked for what was then Isis Equity Partners – now Living Bridge – then took a number of short-lived private equity jobs before his current post became available at BGF in 2011.

“I was initially unsure about it,” he admitted

“No one had heard about it and it was a new idea.

“But I began to understand how different it was to anything else and recognised the quality of the people already there.

“It got to the point where I realised it was something I had to do.”

Thankfully, he has no regrets.

Working for BGF, he says, means lots of variety and excitement, as well as playing a crucial role within a close-knit and positive culture.

“I enjoy going out to meet the businesses and getting my head around what makes them work,” he said.

“The most interesting thing, though, is meeting the entrepreneurs themselves.

“The ones we back are people who very much want to remain in control – very creative and ambitious people.”

All BGF needs to do now is spread the word further and keep up momentum.

“We have had a very good start nationally and in the North,” he said.

“We’ve invested in lots of interesting and exciting businesses and backed lots of great entrepreneurs.

“The team has also developed well and we’re looking to build on all of that.

“In 15 or 20 years time, the ideal would be that people look back and see that we have brought a new offer to the market. Time will be the test.”

Journalists

David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer