AN INNOVATIVE local authority has announced its new funding partner for a £20m investment programme which will help businesses in County Durham grow and create thousands of jobs.
The Finance Durham LP fund will support up to 70 companies in the county in its first ten years with investments ranging from £10,000 to hundreds of thousands of pounds.
The stand-alone investment fund has now appointed a manager, Maven Capital Partners, and will be open for business in the next couple of months.
Durham County Council already has a proven finance innovation track record having invested in the Durham City-based Atom bank. Although authorities have created their own investment vehicles in other parts of the UK, it will be the first of its type in the North East.
Councillor Simon Henig, leader of Durham County Council, said: “We’re seeing more and more firms locate, start up and grow here in County Durham. This £20m to support those businesses as they scale up, create jobs and add economic prosperity to the county, will be a major boost and testament to our commitment to help County Durham’s economy grow.
“They will be investments to yield a return, so we expect to see the £20m grow to help even more businesses in the future. It’s very pioneering for a local authority to do this and we’re very proud to be able to offer support in such an innovative and direct way.”
Business Durham, the economic development company for County Durham, working on behalf of Durham County Council, came up with the idea to help create a more sustainable approach to helping businesses to grow.
Simon Goon, managing director of Business Durham, said: “I honestly think that in five years time we will look back and see this as a transformative time for Durham. No other local authority is doing this to the extent that we’re doing.
“Access to finance has historically been a real issue for businesses in the North East, and while funds like JEREMIE have done a lot to redress that, more can be done. With Business Durham’s support, we can add our expertise and offer a sustainable financial vehicle that really adds value to the economy.”
Maven has been one of the UK’s most active SME investors since 2009, on behalf of a range of client funds. Last month it was appointed to manage the £57.5m NPIF Maven Equity Finance fund, part of the Northern Powerhouse Investment Fund, which will provide equity funding to high potential businesses, including SMEs, across the North West of England as well as the North East and Yorkshire.
Bill Kennedy of Maven, said: ““Maven is delighted to have been selected to manage this new and innovative fund in County Durham. By working alongside the existing regional business support community, in particular Finance Durham, we expect to raise awareness of the financial options available to dynamic, high-growth SMEs across the whole of the county. Alongside providing substantial financial support to suitable SMEs, Maven will work closely with supported businesses to drive value creation and improve operational performance throughout the life of an investment, without interfering on the day-to-day running of a business. We believe that by working in partnership with County Durham SMEs we can help achieve the long term growth objectives of Durham County Council.”
The fund has been designed to link with other investors, such as the JEREMIE 2 fund, and investments will be spread out across all sectors and sizes of business, designed to give a mixed risk portfolio.
Funding will range between £200,000 to £700,000, with ten per cent of the fund being smaller investments, between £10,000 and £40,000, for incubation businesses. Businesses need to be based in County Durham or be relocating to the region when the investment is made.