Investor BGF targets injecting £100m equity into ambitious businesses
THE regional head of the Business Growth Fund (BGF) has pledged to double the amount of money it will pump into ambitious Northern Ireland companies to £100 million in the next three to five years.
Since making its first multi-million pound equity injection in Northern Ireland in November 2015 to family-owned house builder Braidwater, BGF has been one of the region's most active investors in support of growing businesses.
And having just eclipsed the key milestone of getting £50 million out through the door to support six now flourishing firms here, BGF says it sees Northern Ireland as “particularly fertile ground” going forward.
Paddy Graham, who heads up its NI and Central Scotland division, told the Irish News: “Now that we've passed this £50m landmark, we want to do more, because as our portfolio already shows, there are outstanding businesses and management teams here.
“Our next natural target is to reach £100 million of investment into Northern Ireland - and we see an opportunity to do just that.”
Describing itself as a “long-term patient investor”, BGF makes initial investments of between £1 million and £15 million for a minority equity stake in companies.
It backs ambitious teams across a range of sectors and funds a variety of growth plans, and investment and follow-on funding can be used to strengthen balance sheets and, in some circumstances, provide cash out to de-risk existing shareholders.
Among those it has put its backing into in Northern Ireland are home-builder Braidwater, waste operator Riverridge, software firm Audit Comply, coffee shop chain Bob & Bert’s, kitchen manufacturer Uform, and window coverings manufacturer Decora.
All six have generally blossomed thanks to the BGF millions, with Decora and RiverRidge notably both being active on the acquisition trail this year (the management team at Decora has acquired three businesses as part of its plan to expand into European markets while Riverridge showed its confidence to keep growing by snapping up the business and assets of Mallusk-based ISL Waste Management).
“Our pipeline of potential deals for 2021 is strong, with a number of live discussions current ongoing and at least one deal expected to pop out in the early part of the new year,” Paddy added.
“Agility, adaptability and determination has characterised what we've seen so far from our portfolio in Northern Ireland, and we've no reason to believe there aren't others out there with similar traits.”
He believes more Northern Ireland companies should seriously consider equity investment as a mechanism for growth, and insists BGF (www.bgf.co.uk) is the most active investor in the UK, having injected £2.5 billion into more than 300 UK companies since its establishment in 2011.
On events of this year, Paddy says: “We’re not going to forget 2020 in a hurry. But through our proposition of long-term, minority equity capital combined with the UK’s largest network of non-executive talent, we're in a fortunate position to be driving growth at a crucial time for the economy. We were born out of the last recession and times like these really exemplify why BGF was set up.
“Our Northern Ireland portfolio demonstrates BGF’s ability to support family-owned businesses, larger businesses, SMEs and those that are looking to continue growing despite the ongoing pandemic, and there are many more companies here which could benefit from similar investment to drive future growth.
“We're always here to talk, and in the first instance will unashamedly will look at anything and everything, and where if companies are ambitious and have the proper people and teams in place, we'll talk to them.”
To support ongoing growth in Northern Ireland and Scotland, BGF has boosted its on-the-ground investment capabilities following the appointment of Fiona Dornan to its investment team to work alongside Paddy and investors Euan Baxter, David Gammie, Gemma Hamilton and Graham Clarke.