BGF hits £2bn investment milestone after record day of deals

Growth fund BGF has reached a £2 billion investment milestone after committing £48 million to UK and Irish small businesses on a record day of funding.

Paddy Graham, head of central Scotland and Northern Ireland at BGF, praised Scotland's 'ambitious' entrepreneurs. Picture: Contributed

The investor, formerly known as the Business Growth Fund, has injected the ten-figure sum into 285 small and medium-sized enterprises (SMEs) since its formation eight years ago.

It reached the landmark investment total following a £7.5m deal to back Merseyside-based manufacturer Joloda International. This came hot on the heels of the fund’s most active day for capital deployment, which saw it commit a record total of £48m in 24 hours last month.

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BGF has backed 30 SMEs in Scotland, with a combined investment of more than £250m. Recent deals include Cumbernauld-founded foam product maker Moulded Foams and Glasgow-based manufacturer Walker Precision Engineering.

The fund has also recently made several successful exits, such as from Aberdeen-based software developer Petrotechnics and Edinburgh research and development tax credit specialist Jumpstart.

The proceeds of these exits are recycled back to BGF’s £2.5bn balance sheet as part of its “evergreen” funding model.

More than 70 per cent of funding has been committed to businesses based outside of London and the South-east.

Paddy Graham, head of central Scotland and Northern Ireland at BGF, said: “We’ve invested in some of the most brilliant and ambitious entrepreneurs that Scotland has to offer.

“Even in challenging market conditions, ambitious management teams in Scotland have continued to create jobs and are looking for growth opportunities.

“We’re looking forward to seeing more entrepreneurs use BGF’s funding to scale up their business, and at the same time drive Scotland’s economic activity, employment, exports and growth.”

Chief executive Stephen Welton said that the fund’s model was being adopted internationally, adding: “The BGF model is not based on a conventional fund – we are a company, with a strong and liquid balance sheet, set up for long-term investing and long-term growth.

“This is a core part of our appeal to entrepreneurs, vital in meeting the funding gap for growth companies in Britain and Ireland.

“This is a great example of the UK’s proven leadership in financial services, through carefully planned regulatory changes, to deliver a completely new investment model.”