THE new head of the Scottish Investment Bank is broadening its role to help small firms become more investor-ready.
In her first interview since being appointed to the post, Kerry Sharp told Scotland on Sunday that SIB – the brainchild of First Minister Alex Salmond – needed to do more than manage the investment funds it inherited from Scottish Enterprise.
Sharp said: “Investors have told us there are a lot of firms in Scotland in which they’re interested in investing but they just aren’t ready to take finance on board.
“There are a lot of accountants and other professionals out there that can offer help but many companies just don’t have the cash to pay them. So that’s where there’s an opportunity for us to help small firms.”
Salmond unveiled plans for a Scottish Investment Bank during a speech in 2009 but it did not begin operating until two years later.
SIB was criticised in its early days for simply being a dressed-up version of three funding schemes already being run by Scottish Enterprise: the Scottish Seed Fund, Scottish Co-investment Fund and Scottish Venture Fund.
SIB subsequently launched the Scottish Loan Fund (SLF) – which is managed by Glasgow-based Maven Capital Partners – but Sharp now wants to extend the services her bank offers.
“We’ve contributed money to the life sciences fund raised by Sinclair Dunlop at Rock Spring Ventures and we’re managing the £103 million renewable energy investment fund on behalf of the Scottish Government, because these were identified as two areas in which we can have an impact,” she said.
Sharp, a veteran of private equity firm 3i, joined Scottish Enterprise in 2006 and became its director of portfolio management a year later.
She was named acting head of SIB last year after Gerard Kelly took voluntary redundancy, but has only just been handed the job permanently.
“To a large extent, SIB is filling the gap in the market left when 3i decided to stop focusing on small businesses and moved into larger deals,” Sharp said. “That’s what has also stimulated the business angel sector in Scotland.”
Sharp expects her team of 37 staff to grow by about ten in the coming year to cope with the expanded workload. But the headcount could rise even higher as SIB analyses the results of a pilot scheme that saw its “finance-ready” team work with 100 firms.
“We’re looking to see if we should be working more intensely with a smaller number of firms, or if we need to grow the team larger to offer those kinds of services to all firms,” Sharp explained.
Her comments came after a string of exits for SIB, which is estimated to have pocketed £260,000 from the sale of Livingston-based laser maker Edinburgh Instruments to Hong Kong-listed Techcomp and could have brought in a seven-figure sum following the “multi-million pound” purchase by California-based Corsair of Glasgow’s Simple Audio, in which SIB held a 28 per cent stake.
SIB’s 4.8 per cent stake in Dundee-based cash machine advertising software firm I-design will bring in £410,000 when it is sold to Cardtronics.
“We need to get companies thinking about exits when they take on funding,” Sharp said.