By Marcus Leach
Sir Nigel Rudd, one of the most experienced business leaders in the UK, will chair a new £2.5 billion equity investment company set up to help growing British companies.
He will be joined in due course by Chief Executive Stephen Welton who brings 20 years' experience in industry as well as the private equity and growth capital sector.
From April 2011, the Business Growth Fund plc (BGF) will begin making investments in smaller and medium sized UK businesses, typically with an annual turnover of between £10 million and £100 million.
This will give companies long term financial support so they can achieve their full growth potential, and play their part in securing Britain’s long term economic recovery. It will support businesses with the ambition, dynamism and drive to expand and grow, revitalising Britain’s economy, creating new jobs, and finding fresh export markets abroad.
John Varley, former CEO of Barclays and Chairman of the Business Finance Taskforce which established the BGF, welcomed the appointments saying:
“I am delighted that Sir Nigel Rudd and Stephen Welton have agreed to lead the Business Growth Fund. Together they will make a formidable team, and will deliver one of the key initiatives which the Banks have put in place to support British business.”
The BGF is backed by all six of the UK’s main banking groups, Barclays, HSBC, Lloyds Banking Group, RBS, Santander and Standard Chartered.
The new Chairman, Sir Nigel Rudd said:
“We want to make a lasting and substantial economic impact by broadening the financial options available to businesses. By investing equity in Britain’s most dynamic businesses and being involved at a board level, we intend to foster a very collaborative approach to financing growth.”
Chief Executive, Stephen Welton added:
“We will help businesses that have often struggled to secure finance because of the ‘equity gap’ for companies looking for long-term growth capital in smaller amounts. We will be looking for sound investments where we can make minority investments, with sensible protections, looking for long term positive relationships with the companies in which we invest.
"I have worked extensively with entrepreneurs during my career and look forward to helping create an improved environment in the Uk for the growth companies of tomorrow to succeed.”
The BGF will begin assessing business plans and requests for funding from April 2011. It has the capacity to invest £2.5 billion over the coming years. The investments will be in equity or related instruments, taking minority stakes of between £2 million and £10 million each. In addition to an injection of capital, the BGF will also normally take a seat on the board of those companies, offering valuable advice and guidance to help those businesses succeed.