Newcastle-based investors NEL Fund Managers have passed the £20m milestone apportioned through the Finance for Business North East Growth Fund.
NEL’s recent investment in Seaham-based IT providers Powerdial Services tipped the regional fund managers over the landmark.
The Growth Fund investment period is due to complete in March 2015 and NEL says it already has capital in place to continue investing past that point.
To date, firm has made 100 investments through the Growth Fund – a general fund aimed at creating 1,500 jobs and safeguarding a further 1,300 in the North East.
It is part of the wider Finance for Business North East Fund – created by now defunct development agency One North East – which will see £125m of investment capital injected into the region by the European Investment Bank, the European Regional Development Fund 2007-13.
The £20m figure represents the original value of the Growth Fund, before it was increased by a further £3m in summer 2013 by North East Finance, the holding fund manager with overall responsibility for the £142m Finance for Business North East initiative, to help maximise the number of firms across the region that it could support.
Nineteen North East businesses have secured follow-up Growth Fund investments from NEL after their first ones helped them successfully implement business development plans.
Barrie Hensby, chief executive at NEL, said: “Reaching this landmark is a fantastic way for us to close one of the most successful investment years that NEL has had in our 25 years in business.
“The impact that our investments make in terms of sustainable employment, supply chain spending and wealth creation is clear, and their positive impact on both individual firms’ capacity to grow and on the wider North East economy will be felt for many years to come.
“Even in the most difficult economic period of the last five years, we’ve had a lot of interest in the Growth Fund, which is clear testament to the enduring ambition and innovation that has always characterised the North East business community.
“The returns we’ve already made will add significantly to the planned JEREMIE 2 funds which will come on-stream at the beginning of 2016, and which will maintain the crucial flow of development capital that is available here.
“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 still as high as it’s ever been.”
Andrew Mitchell, chief executive at North East Finance, added: “The fact the Growth Fund has reached this fantastic milestone is evidence that the Finance for Business North East programme is working effectively. It is creating jobs, fuelling business growth, generating wealth and sustaining the local economic recovery.
“The programme is ideal for businesses that have struggled to secure mainstream finance but require additional funds to assist their growth plans. Money from the scheme is still available for companies looking to expand their operations and take on extra staff.”