Don’t shun investors, families told

RBS was among the banks who helped set up the Business Growth Fund. Picture: Greg Macvean
RBS was among the banks who helped set up the Business Growth Fund. Picture: Greg Macvean
Share this article
0
Have your say

FAMILY businesses could be missing out on the capital and connections that external investors can offer because they are worried about losing control of their companies, an event in Edinburgh will hear next week.

More than 50 per cent of the private sector workforce in Scotland is employed in family-owned firms. There are about three million such businesses across the UK, generating more than £1.1 trillion in turnover.

To highlight the benefits of tapping into external growth capital, the Institute of Family Business (IFB) has teamed up with the Business Growth Fund (BGF) to host a dinner in Edinburgh on Wednesday.

Simon Munro, regional director for Scotland at BGF, said: “There is no need for a family to lose control of its business if it only offers a minority holding to equity investors. BGF only ever takes minority stakes in the companies in which it invests. We invest for up to ten years and can be flexible over our exit route so that it suits the business.”

BGF, which invests between £2 million and £10m per business in return for a minority equity stake and a seat on the board, was set up in 2011 by banking groups Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered.

Last year the fund provided an £8.5m cash injection for ACS Clothing and the Glasgow-based suit hire business will extol the advantages of external funding at next week’s event, which is also due to hear from David Murray, chairman of IFB Scotland and the son of former Rangers owner Sir David Murray.

“Taking on equity investment might be uncomfortable for some families because they are worried about losing control of their businesses,” Murray said.

“There are compelling reasons to consider funding for growth in this way and the generation that recognises this may be the one to change the family’s future for the better.”

SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING

Get the latest business headlines from a variety of news sources emailed to your inbox each morning