British investors prepare SME-focused fund with ISIF

BRITISH investment firm Business Growth Fund (BGF) is preparing an SME-focused fund in conjunction with the Ireland Strategic Investment Fund (ISIF), the Sunday Independent understands.

The fund, believed by market sources to range from €50m-€100m in value, would pump more cash into the economy for Irish businesses seeking to grow.

A spokesperson for BGF said the company was “unable to comment”, while an ISIF spokesman said its policy was not to comment on “trans- actions that may or may not be under consideration until the transactions have been completed.”

If the fund proceeds it would represent a foray into the Republic for BGF, which has already been active in the North.

“Backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered – BGF is an independent company with up to £2.5bn with which to make long-term equity investments,” BGF’s website states.

The growth capital it provides is usually between £2m–£10m for a minority equity stake and a board seat, the website says.

ISIF — managed by the NTMA — is an €8bn sovereign fund with a mandate to “invest on a commercial basis in a manner designed to support economic activity and employment in Ireland”.

It recently made headlines for taking a 32pc equity stake in non-bank lender Finance Ireland for €30m. It has also invested in a €30m fund alongside BMS Finance to provide non-bank debt to SMEs, and a €60m fund alongside Causeway Capital Partners for “established SMEs in Ireland and the UK”.