Fund manager sought for £150m Scots investment fund

Ken Cooper

The British Business Bank is inviting proposals from fund managers to operate the new £150 million Investment Fund for Scotland.

The bank said it expects to appoint fund managers in Spring 2023 ahead of launching in the summer.

It said that while it has seen an encouraging stream of equity deals into Scottish firms over the past couple of years “the overall levels of equity investment and also private debt lending remain much lower than Scotland’s share of the UK’s small business population.”

The Investment Fund for Scotland will operate across three tiers — smaller loans (£25k-£100k), debt (£100k-£2m) and equity (up to £5m).

The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK government.

The bank is establishing investment funds in areas not currently served by its existing regional funding programme before launching follow-on investment funds in existing fund areas.

The bank said it is on course to launch the £150 million investment fund this summer, aimed at driving the growth of small and medium-sized businesses in Scotland.

Since its existing investment funds launched throughout the UK, the bank said it has invested over £605 million.

Ken Cooper, Managing Director, Venture Solutions, British Business Bank, said: “The new Investment Fund for Scotland builds on the success of the bank’s existing regional funds and is designed to increase the supply and diversity of finance available to smaller businesses in Scotland.

“Our aim is to reduce imbalances and break down barriers that small firms may face in accessing finance, creating a more level playing field.

“Given the geographical spread of Scotland’s smaller business population, connecting with entrepreneurs in some of the more rural and hard-to-reach areas will be an important focus of the fund.

“While we have seen an encouraging stream of equity deals into Scottish firms over the past couple of years, the overall levels of equity investment and also private debt lending remain much lower than Scotland’s share of the UK’s small business population. We’ll be working closely with the local small business finance ecosystem to ensure the fund provides support to innovative, ambitious business owners across the country.”