The Business Growth Fund is the UK's most active investment company, providing growth capital for small and medium-sized enterprises in the United Kingdom and Ireland. As of May 2019, the company has invested over £2.25bn of its £2.5bn balance sheet. Notably, BGF has invested over 60% of this total in businesses headquartered outside of London and the South East of England. The company makes initial investments between £1m to £15m to support companies at various stages of their organizational life cycle. BGF has invested in start-up companies, growth-stage companies and AIM listed companies across every region and sector of the UK economy, barring financial services. BGF adopts a patient capital investment strategy, which means it takes a minority, non-controlling stake in its equity partners. The company aims to back the long-term goals set by management teams in its investments by forgoing short-term profit expectations in its portfolio.
History
BGF was founded in 2011 by Barclays, HSBC, Lloyds Bank, Royal Bank of Scotland and Standard Chartered banks, in the wake of the 2008 financial crisis. The investment company was established to provide small-to-medium sized businesses with financial investment, which were otherwise under-served by the traditional set of finance and private equity firms. In 2015, BGF launched BGF Quoted, which specialises in investments in publicly listed companies. The fund makes investments between £1 million and £10 million in value, in exchange for a minority shareholding. In 2016, BGF launched BGF Ventures, which is a fund dedicated to early-stage companies with smaller revenues. The fund makes investments of between £1 million and £6 million, whilst maintaining a minority, non-controlling stake.
Leadership
Stephen Welton, formerly of JP Morgan Partners, has been the CEO of BGF since 2011, the year of its inception. In 2013, Stephen was appointed as an advisor to the government regarding the establishment of the British Business Bank, and, in 2017, he was invited to join the Industry Panel for the UK Government’s .
Patient Capital
BGF provides patient capital funds to organisations at all stages of their growth cycle. This long-term approach to investment empowers management teams to execute long-term growth plans and maximise returns in the long-term. The UK Government has identified the need for a greater supply of patient capital, which is being addressed through the Patient Capital Review, and consultation ‘Financing Growth in Innovative Firms’.
Locations
BGF has 16 offices across the United Kingdom. Its offices are located in London, Bristol, Reading, Cardiff, Milton Keynes, Cambridge, Birmingham, Nottingham, Manchester, Leeds, Newcastle, Edinburgh, Aberdeen, Belfast, Dublin and Cork. BGF is also the largest source of patient capital dedicated to small and medium-sized companies based in Ireland. The organisation has up to €250 million to invest and is backed by the Ireland Strategic Investment Fund, AIB, Bank of Ireland and BGF’s existing shareholders. The company’s Irish operations are based in Dublin.
Investment Portfolio
BGF has invested in more than 300 small and medium-sized enterprises since 2011, investing in a diverse portfolio of early-stage, growth stage and listed businesses. In 2017, BGF was the most active funder of UK scale-ups, completing twice as many deals as the next most active funder.
