Venture capital firm PGE raises £34m to plug funding gap

Published on Monday 14 June 2010 19:56

A SCOTTISH venture capital firm set up by three former Bank of Scotland employees has raised £34 million for its maiden small business investment fund.

Panoramic Growth Equity (PGE), which was founded last year by three former members of BoS's growth equity team, intends to target "later stage" British firms, which have come to the end of business angel support but which are still too small to attract the attention of private equity groups.

The firm's fund, called Panoramic Enterprise Capital Fund 1, has attracted 12.3m from private investors and institutions, with the remaining sum coming from the UK government's ECF scheme – based on a similar fund in the US, which helped support ventures such as FedEx in the early stages.

PGE was established last year by Stephen Campbell, David Wilson and Malcolm Kpedekpo who met while working in BoS's niche small firm equity team.

Campbell told The Scotsman: "A gap has developed (in funding fast growth small firms] as the traditional equity suppliers have moved upstream. We are between the business angels and big institutions."

Campbell said he was encouraged by the response from private investors – who include a number of high net worth individuals – given the challenging economic environment.

"It is a difficult funding environment but one of the advantages with the ECF is it's quite an attractive proposition for private investors as if the fund does well, they can make higher returns than they would normally."

Campbell added: "SMEs are the backbone of the UK economy, accounting for over 50 per cent of UK private sector revenues. There are many first-class companies out there who do not have the means to raise capital to take them to the next stage using traditional debt financing routes because those sources are now in short supply."

The government's 21.7m backing for PGE's fund is the largest commitment since the ECF scheme was established. It will allow PGE to offer individual investments of between 500,000 and 2m. The group describes itself as "generalist" but the team's previous experience involves supporting medical, business services, energy and communications firms.

Campbell, Wilson and Kpedekpo are supported by an advisory panel which includes Drew Thomson, ex-finance director of British Airways, Jim Calder, founder of executive search firm Jim Calder Associates and Tony Lochery, former managing director of Kwik Fit.

&#149 Glasgow-based Hamilton Capital Partners yesterday announced the purchase of two government-let properties as part of its 30 million HCP Commercial Property Fund. They have acquired George Stephenson House, Stockton on Tees, for 10.1m and Hamilton House in Hamilton for 3.9m.