State funder backs €250m equity fund for Irish SMEs
THE State’s economic stimulus vehicle has confirmed its backing for the largest-ever growth capital fund dedicated to Irish small- and medium-sized companies.
The Ireland Strategic Investment Fund (ISIF) along with AIB and Bank of Ireland, is a backer of the new €250m investment fund for Irish SMEs managed by BGF, formerly the Business Growth Fund, a private UK-based company whose backers include a slew of British lenders.
The Irish fund will be run by a new, dedicated BGF team based on Merrion Square, Dublin, and led by Leo Casey, former director and board member with IBI Corporate Finance.
The new team also includes David Gammie, Joe Higgins and Maedhbh O’Driscoll.
BGF will provide initial investments of between €2m and €10m in return for a minority stake in companies it backs, with additional funding to investee companies as needed.
The businesses it plans to back will typically have revenues of between €5m and €100m a year and have a strong management team in place.
In the UK, where BGF has been in operation since 2011, it is now the most active investor in growing businesses across a range of sectors from housebuilders to retail, the fund said.
In Ireland, the plan is to provide long-term equity investments to small- and mid-sized businesses planning to scale up their operations. CEO Stephen Welton said the investor will bring expertise in scaling up businesses as well as financing to companies it backs.
“BGF exists to enable entrepreneurs and management teams to realise their ambitions by helping them to scale up and reach new heights.
“Along with capital we bring knowledge, resource and patience,” he said.
ISIF director Eugene O’Callaghan, described the funding model as “patient equity” and said it would address a significant gap in the market.
“Judging by BGF’s success in the UK, we expect that it will attract significant interest from Irish entrepreneurs and family businesses.
“We are very pleased to be supporting BGF’s entry into the Irish market.”
BGF has already invested here, in Renegade Spirits Ireland, a new whiskey producer based in Waterford and Escher Group, which provides software to the global post office market.
‘BGF can enable entrepreneurs and management teams to realise their ambitions by helping them to scale up and reach new heights’