Venture capital trusts managed by NVM Private Equity have raised just under £20m in less than a month as part of a £50m funding call to be invested in businesses across the North East and the rest of the UK.
Northern Venture Trust PLC, Northern 2 VCT PLC and Northern 3 VCT PLC – all managed by Newcastle-headquartered NVM Private Equity – launched joint offers for subscription three weeks ago, to raise up to £50m.
Despite launching the call in the height of summer, private equity provider NVM has reported a strong appetite for investment within the region having so far raised almost half the target figure, with investors keen to provide support to growing firms across a range of sectors in the North East and beyond.
The investment firm, set up 28 years ago, welcomed the rapid response, saying it demonstrated wider recognition that SMEs will drive the UK out of recession.
Investors have the option to invest in any one or a combination of the funds, which will be invested mainly in later-stage unquoted UK companies with high growth potential.
Minimum investment is £6,000 across the three VCTs which aim to provide investors with high long-term tax-free returns through a combination of dividend yield and capital growth.
In the last year NVM’s funds have invested more than £30m in six growing businesses including the backing of a £4.4m management buyout of Cleveland Biotech (Holdings) and £7m in the management buyout of Buoyant Holdings, a British manufacturer of upholstered furniture founded over 100 years ago.
There have also been some profitable exits from the portfolio, with the sales of Paladin Group, Interlube Systems, Tikit Group and IG Doors taking place in the same period, delivering combined income and capital proceeds of over £27m.
Mauro Biagioni, investment director for the North East, represents NVM on the boards of North East based Kitwave, Wear Inns and now Cleveland Biotech.
He said: “We are pleased to be part of the companies’ ongoing success. Importantly, the initial investment is just the start of a long-term relationship between us and the investee company.”
The offer sizes are £15 million for Northern Venture Trust, £15m for Northern 2 VCT and £20m for Northern 3 VCT, with closing dates of April 4 and April 30 next year, unless they are fully subscribed earlier.