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11th September 2008
CAT.153
BFM (AEIF feature)
Three years ago Catapult Venture Managers was appointed to manage the £20m AEIF (Advantage Enterprise and Innovation Fund) backed by Advantage West Midlands and the European Regional Development Fund.
Rob Carroll, Managing Director of Catapult takes a look at the impact of the Fund on the development of early stage and medium sized businesses and its contribution to the Midlands regional economy.
The AEIF is a ‘matching fund’ set-up to service the top end of the ‘equity-gap’, providing between £250k and £1m to be invested in individual enterprises, with Catapult seeking a matching amount from the private sector.
Such an approach effectively leverages double the capital investment for the benefit of SMEs, giving a total boost of between £500k and £2m with private sector match.
When Catapult was appointed managers of the AEIF, we were delighted to be working alongside Patrick Palmer (Head of Access to Finance, Advantage West Midlands) and his team.
Since 2005 we have jointly supported a number of Midlands-based enterprises through the AEIF investing £5.7m in 11 businesses. Together with matching funds and debt, we have facilitated an additional £14m of monies for the companies we have invested in.
Our investments have included emerging technology businesses such as Michelson Diagnostics (MDL) and L3 Technology Limited; as well as providing capital for the restructuring of established manufacturing companies, of which Whelan Oil Refining is an excellent example.
Within the Midlands region are numerous excellent organisations which act as a catalyst to growth, resulting in new jobs and more money being generated and spent in the local economy. These facilitators include: Connect Midlands, GINEM (Growth Investment Network East Midlands), and last but not least, regional development agency Advantage West Midlands and the European Regional Development Fund.
Advantage West Midlands leads the development of our region’s business base by attracting international investment, developing key industries, encouraging enterprise and innovation, raising skills levels and co-ordinating the provision of finance and business support to companies.
It has put in place a cohesive range of regional policies and it’s policies are aligned with ‘Connecting to Success’, the West Midlands Economic Strategy.
AEIF investments
As I mentioned at the beginning of this article MDL, L3 Technologies and Whelan Refining are particularly good examples of pioneering companies benefiting from funding via the AEIF.
MDL, which has offices in the West Midlands, is one of the most innovative and exciting prospects on our portfolio books. It was set-up in 2006 by Jon Holmes and four other ex-employees of Sira – the photonics instrumentation company.
We invested £250k in an early stage funding round of £600k in October 2007, allowing MDL to pursue trials of its novel imaging system for aiding cancer treatment. The technology allows clinicians to see, during an operation and in real time, the location and extent of a tumour, for a range of cancer types.
At the beginning of this year we invested £600k into Warwickshire-based L3 Technology Limited and introduced David George to the Board. Formerly the UK Chief Executive of Chiron Diagnostics, his experience in the sector was seen as a major asset to the future growth of the company.
L3 Technology is developing exciting new point of care equipment for the accurate measurement of blood cholesterol including full lipid analysis.
The technology enables immediate results for patient testing in GP surgeries,
with the accuracy and precision of central laboratory analysis.
In May 2006 Catapult and Bridges Community Ventures led a £1.8m funding package into Staffordshire-based Whelan Refining. The funding was to allow it to refurbish an existing site in Stoke-on-Trent in order to recycle used fuel oils for blending into industrial lubricants.
The plant, based close to Sneyd Hill, was a former oil refinery which hit troubled times when the oil price dropped to $20 a barrel back in the 1990’s. However with the oil price having been recently up to around $140 a barrel and now hovering around $100, things are looking very rosy indeed for the business.
Now, as the UK economy moves into recession, funds like the AEIF are more important than ever. With banks increasingly reticent to lend money, innovative new companies and those seeking funding to take the business to the next level, will need to find alternative ways of accessing finance.
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For further information contact Rob Carroll at Catapult Venture Managers on 0116 238 8200 or 07976 226252; or Paul Shrimpton at PSPR Ltd on 0121 354 7311 or 07979 505322.
Note to editors:
Catapult Venture Managers Ltd is a leading private equity fund manager with one of the largest investment teams in the Midlands operating from offices in Birmingham and Leicester. With 80m in Funds under its management Catapult seek equity investment opportunities from £200k to £2m for growing businesses. Contact details for Catapult are 0121 616 0180 (Birmingham), 0116 238 8200 (Leicester) or catapult@catapult-vm.co.uk Catapult Venture Managers Ltd is Authorised and Regulated by the Financial Services Authority. The Advantage Enterprise and Innovation Fund (AEIF) is funded by Advantage West Midlands and the European Regional Development Fund.
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