North East venture capitalists weigh in on positive year of investing

Regional fund managers and investors were positive about the investing landscape in 2014

Alasdair Greig, director of Northstar Ventures
Alasdair Greig, director of Northstar Ventures

Venture capitalists in the North East have lauded 2014 as a positive year for the investing landscape of the region.

The Journal’s business pages have been littered with many smaller and mid-market investments throughout the year and now some of the region’s key investors have talked of their confidence in the quality and quantity of entrepreneurial activity in the region.

Northstar Ventures, the firm which manages the £27m Finance for Business North East Accelerator Fund and the £17m North East Proof of Concept Fund, pointed to growth in the digital and IT sector.

The firm’s director, Alasdair Greig, said: “Over the past year, we have seen a positive increase in deal flow in the North East. In spite of the difficult economic climate, conditions have remained steady in most sectors, but we have seen a particularly positive growth in the digital and IT sector.

“Programmes such as Ignite have had a great impact on the region, bringing a number of exciting new start-ups from all over the world who want to build their businesses in the North East.”

Elsewhere, the chief executive of NEL Fund Managers, Barrie Hensby, said: “We’ve seen a strong end to 2014, with both plenty of deals being completed and lots of interest in the capital we have available, and the feeling of greater regional economic stability has grown through the year.

“We have capital in place to provide a seamless transition into the months after the Growth Fund investment period completes at the end of December, and we’re looking forward positively to 2015 and beyond.

“The impact that investment capital makes in terms of sustainable employment, supply chain spending and wealth creation is clear, and its positive impact on both individual firms’ capacity to grow and on the wider North East economy will be felt for many years to come.”

NEL invested more than £20m from the Finance for Business North East Growth Fund and Mr Hensby said the arrival of JEREMIE 2 funds at the beginning of 2016 would give the region’s industrial base the capital it needs to keep developing.

He added: “It’s up to each company’s management teams to identify the best way to utilise the capital that’s available to help them grow and succeed.”

Michael Dickens, fund manager at Rivers Capital Partners, said 2014 had been one of the busiest years for the Finance for Business North East Angel Fund – which Rivers manages alongside the North East Microloan Fund.

Mr Dickens said: “Would-be entrepreneurs and established businesspeople are showing more confidence, and willingness to take risks starting a new venture.

“We’ve noticed this confidence has also encouraged entrepreneurs to invest more of their own money in their ventures – thereby coming to investors like Rivers with a better, more rounded proposition which is ready to go to market.

“This positive mindset can be observed in the loan finance market, with entrepreneurs taking on more debt to grow their business. Over the past few months, the Finance for Business North East Microloan Fund has seen an increase in demand as early-stage businesses now understand they need to seek alternative sources of finance.

“This year has seen a continuation of the North East as a great place to launch and grow a business.”

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