The Future’s Bright….
Many SMEs are feeling the effects of the credit crunch and many are facing difficult or uncertain months ahead. The new North West Venture Capital Loan Fund will provide a vital source of finance to businesses, allowing them to start and expand. In turn this will create a positive impact on the regional economy. The good news is that procurement process for managing this Fund is well underway and it is hoped that it will be up and running as quickly as possible.
Established businesses may have experienced the effects of crumbling financial markets before and I believe they together with the professional services industry, the banks and investors like us have a role to play in helping younger businesses through the current downturn. It is easy to lose sight of this in the hysteria whipped up by the press and I urge all of you who have the experience to proactively use it to ensure our region is the healthiest it can be at all times.
Recent Investments…
In the last two months we have had an influx of applications and in particular for funding from our Small Firms Fund and Mezzanine Fund. The Small Firms Fund has invested £1.1m in the past 10 weeks alone in 27 businesses from a variety of sectors.
Follow the links below to get the full story on some of our recent deals….
AFM Backs Novel Drug Testing Company
Christmas Every Day for Liverpool Business
Flasma Steps into International Markets with £350k Investment
Funding Package Bakes Bright Future for Southport Business
£1m Investment Supports Development of Innovative Payment Services Company
AFM Supports Entrepreneurial Furniture Design and Manufacturing Duo
In addition, the MSIF Venture Fund has recently completed a £600k investment into a fuel distribution business. Rowilco Limited was founded in 2007 by Managing Director Neil Williams and has already grown to a turnover of £30m. The AFM investment team was led by Investment Director Mark Borzomato and assisted by Investment Manager Jon Wormald. The funding will be used for development capital to support the further expansion of the business.
And Some Returns….
The Mezzanine Fund recently exited on its investment into Knowsley electrical installation specialists, MJ Quinn which provided a handsome return to the Fund.
Follow this link to read the full story…..
AFM Reaps Substantial Return for MSIF Mezzanine Fund from MJ Quinn Deal
Winning Team…
We were absolutely delighted to scoop the coveted ‘Fund of the Year’ Award for the second year running at the North West Business Insider Dealmakers Dinner. The glittering ceremony held at Manchester Central was attended by around 800 guests from the region’s corporate finance and business community.
We would like to take this opportunity to thank all our clients and everyone who we work with for their support.
The Real Story….. Regeneration v Sustainability
Some of you may have picked up on an article in the Daily Post recently which attempted to comment on our financial accounts. Regrettably the article was inaccurate and misleading.
The article suggested that Venture Fund 3 has invested £19.5m with £16.2m of write offs when it has in fact invested more than this and had (at 31/03/08) a portfolio valued at cost less provisions of £12.2m. We show no uplift for anticipated but unrealised increase in value but we make provisions immediately we feel it is necessary. For those of you who may have concerns, the facts are we have 16 live investments and there is an abundance of quality in our portfolio. Collective turnover exceeds £130m and a current EBITDA of £14m and we are confident these businesses will create good returns for MSIF in the future.
The article also failed to recognise Venture Funds 1 and 2 continuing portfolios. The success of Vitaflo enabled the Fund to repay the whole of the private sector investment in Venture Fund 1 in May this year.
It is also important to highlight the work of our other Funds.
Mezzanine Fund 1 and Small Firms Fund 1 and 2 have fully repaid all of their facilities and are now making distributions from profit to all of their investors including MSIF. This has enabled MSIF very recently to establish a successor fund which currently stands at £3m and is the start of the evergreen funding to which we refer from time to time. This figure will continue to grow with further realisations.
With five years of realisations yet to come it is perhaps early doors to comment on Mezzanine Fund 2 and Small Firms Fund 3 performance however signs are extremely positive when compared to the previous Funds with significant elements of the private sector already repaid.
The Liverpool Seed Fund has now invested in 71 companies. The remit of this Fund is to back high risk propositions that would normally find funding extremely difficult to come by. Its portfolio is still not mature but there are plenty of businesses within it which are beginning to shine.
I am delighted with the transition of our business (which was a start up in 1996) and the funds we manage. We are here to genuinely help SMEs start and grow and there has never been a more important time for funds like the ones we manage. We take risks in order to, in the longer term, deliver significant regeneration of the region but also demonstrate a sustainable financial approach to taking those risks.
Since it was set up in 1996, the Funds have backed more than 1,200 companies, created 6,300 jobs, saved a further 4,781 jobs and brought in excess of £222m private sector investment to the region. In addition to cash, businesses can also access a range of valuable support services to help them develop and grow. This information is regularly updated on our website.
I hope you find this update useful. If you would like to discuss any of this with me further, please do not hesitate to give me a call.
Thank you to all who continue to support us and the SME community we are here to serve.
Kindest regards.
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