Member Article

NEL fund managers hit £10 million growth landmark

Regional fund management firm NEL Fund Managers has hit a major milestone in its operation of the Finance For Business North East Growth Fund by reaching £10 million in realisations from the investments it has made so far.

The £10 million figure comprises a mix of loan repayments, interest, profit shares and dividends spread across the 94 Growth Fund investments that NEL has made since the fund launched in early 2010.

And with the investment periods for just ten of these deals having so far ended, there will be substantially more to follow over the coming years which will further enhance what the Growth Fund’s investors are able to do around future investment in North East businesses.

One of NEL’s completed investments was made in 2011 in Royston Power Generation, which sells, installs, maintains, services and repairs diesel engines for a wide range of domestic and overseas blue chip clients in the marine, offshore, utility and defence sectors.

The Walker Riverside-based firm has seen its turnover increase from £8m when the investment was made to around £12 million today, and managing director Lawrence Brown believes the Growth Fund investment it received has played a significant role in securing this increase.

The Growth Fund is a general investment fund aimed at businesses at a development and growth stage based anywhere in the north east, and was set up with a view to creating 1,500 new jobs in the region, as well as helping to safeguard a further 1,300 jobs.

NEL has so far invested over £19 million from the fund, with an average investment value of around £210k, and has a number of further proposals at different stages of the application assessment process.

Lawrence said: “The capital we received from the Growth Fund investment gave us the capacity to compete for larger and better capital investment tenders against rivals who would have previously been too strong for us to go up against.

“It’s made a clear difference to both our commercial performance over the last three years, as well as our expectations for the future, and the NEL team’s ongoing support, advice and guidance has been invaluable as our operations have developed.”

Chief executive at NEL, Barrie Hensby, said: “We generally work to a ten-year timeframe for any given investment fund, using the first five years to distribute the available capital and the second five to see our investments realised, so reaching this figure within just four and a half years of the Growth Fund’s launch is extremely positive news.

“The capital we provide is always just half the story of what we do, with its long-term impact on the North East economy in terms of the business development plans successfully implemented, the jobs created and sustained, and the returns made to our investors that will go towards future investment funds combining to have a tremendous positive impact right across the region.

“Accessing capital from the Growth Fund has allowed dozens of company owners and management teams to implement strategies that they believe will enable their businesses to expand and thrive while also retaining full ownership of the company that they’re worked so hard to create and build up, and the results we’re seeing are testament to their continuing success.

“The type of mezzanine funding we offer remains very attractive in comparison to equity investments, and the rate of investment enquiries we’re receiving is as high as it’s ever been.”

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