The chief executive of the Business Growth Fund (BGF) has hailed an innovative north-east investment partnership as a model for others to follow.
Meanwhile, the bank-backed investment fund he leads has revealed ambitions to “get deals done” in Inverness.
Stephen Welton was in Aberdeen for the official opening of the BGF’s plush new offices in Golden Square.
The Granite City operation currently has 13 portfolio businesses on its books, accounting for more than £100million worth of BGF investment to date.
One of these companies, FrontRow Energy Technology Group (FETG), is steadily building its own portfolio of investments in offshore oilfield services.
FETG has had significant financial backing from BGF, adding to funds already put in place by its founders – a team of industry veterans, including former Expro Group chief executive Graeme Coutts.
Mr Welton said the partnership worked well, adding: “FrontRow is a really innovative way of using a balance sheet to invest in oilfield services.
“We’re now wondering if we can do something similar in other sectors and in other parts of the country.”
BGF was established in 2011 to help the UK’s growing smaller and medium-sized businesses.
Backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered – it is an independent company focused on long-term equity investments.
To date, it has invested more than £1.3billion in about 200 firms employing tens of thousands of people.
Mike Sibson heads up its Aberdeen office, where a four-strong team is likely to be joined by another investor in the near future.
Mr Sibson said there would be further investments by the north-east operation during 2018, while it was also poised to make its first exit after helping one of the portfolio companies to grow.
Inverness and Dundee businesses are a target, he said, adding: “I’d like to get deals done in both cities.
“We have looked at three or four things seriously but nothing came of it.
“Once we get the first deal done, then people will see that and it will lead to new opportunities.”
BGF has recently extended its reach to Ireland, while its CEO said there was no shortage of opportunities to “go deeper” in the UK.
“The potential for us to increase the level of investment is fantastic,” Mr Welton said, highlighting “a massive requirement” for more houses.
BGF has backed housebuilding in Fife, north-east England and Northern Ireland, while it is also targeting opportunities to support the UK Government’s industrial strategy.
The company’s £2.5billion “evergreen” fund delivers initial investments of up to £10million in return for a minority stake. Its 2017 deals include a £6.5million investment in north-east catering firm Entier.