A regional fund management firm has reached a £10m milestone in realisations from investments it has made so far.
NEL Fund Managers, based in Newcastle, has achieved the landmark in its operation of the Finance For Business North East Growth Fund, with the eight-figure sum comprising a mix of loan repayments, interest, profit shares and dividends spread across the 94 Growth Fund investments made since 2010.
Investment periods have ended for just 10 deals, meaning realisations will be substantially larger over the coming years, giving the firm greater scope for future business investments.
The Growth Fund is a general investment fund aimed at businesses at a development and growth stage based anywhere in the North East, and was set up with a view to creating 1,500 new jobs in the region, as well as helping to safeguard a further 1,300 jobs.
NEL has so far invested over £19m from the fund, with an average investment value of around £210,000, and has a number of further proposals at different stages of the application assessment process.
Chief executive Barrie Hensby said: “We generally work to a 10-year timeframe for any given investment fund, using the first five years to distribute the available capital and the second five to see our investments realised, so reaching this figure within just four and a half years of the Growth Fund’s launch is extremely positive news.
“The capital we provide is always just half the story of what we do, with its long-term impact on the North East economy in terms of the business development plans successfully implemented, the jobs created and sustained, and the returns made to our investors that will go towards future investment funds combining to have a tremendous positive impact right across the region.
“Accessing capital from the Growth Fund has allowed dozens of company owners and management teams to implement strategies that they believe will enable their businesses to expand and thrive while also retaining full ownership of the company that they’re worked so hard to create and build up, and the results we’re seeing are testament to their continuing success.
“The type of mezzanine funding we offer remains very attractive in comparison to equity investments, and the rate of investment enquiries we’re receiving is as high as it’s ever been.”
Andrew Mitchell, chief executive at North East Finance, the holding fund manager with overall responsibility for the £142.5m Finance for Business North East initiative, added: “This £10m milestone is a great achievement that demonstrates how effectively this funding programme is working.
“The whole idea behind FBNE is to generate further wealth from the initial investment – this money can then be reinvested to create more jobs and boost the growth of local businesses.”