Edge Investments, a leading creative industries investor, has raised a new £40m fund to invest in high growth companies in the creative industries.
Edge’s new Edge Creative Enterprise Fund brings together private sector funding from leading institutions and high net worth individuals, with a significant investment from the government’s British Business Bank.
The creative and cultural economy is an important and growing part of the global economy, and Britain’s creative industries sector is thriving: the creative economy accounts for approximately 10% of the entire UK economy and provides 2.55 million jobs; this employment is growing four times faster than the economy as a whole.
The fund will target investments in the creative industries, in essence companies that trade with creativity, knowledge and information. The key aspect which these businesses have in common is the creation, acquisition, management and commercial exploitation of intellectual property, which translates into economic value.
The sector is characterised by the opportunity to build scalable revenues. Nimble businesses produce content that can be sold multiple times globally, whilst new technologies continue to provide impetus within the sector.
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Edge Creative Enterprise Fund will back fast growing and revenue generating small and medium-sized creative companies, which have access to core intellectual property assets which Edge believes are poised to benefit greatly from the growing digital economy, and which can be scaled.
The fund is targeting a minimum three times return for its private investors over its 7 – 10 year life.
Investments CEO David Glick called the creative industries “one of the UK’s great success stores”.
“Our view is that a high degree of sector knowledge mitigates risk and also allows us to assess the most promising opportunities and most talented executives,” he said.
“There are nearly 160,000 creative industries businesses in Britain yet despite being in this high growth sector, many of them find it difficult to attract adequate capital to maximize their potential.
“Our new Edge Creative Enterprise Fund aims to fill that funding gap. Edge Creative Enterprise Fund will bring much-needed growth capital to smaller businesses in the creative industries, and we are grateful to the British Business Bank and all the fund’s investors for their support.”
Ken Cooper, managing director, Venture Capital Solutions at British Business Bank, added: “This is the first fund specifically focused on the creative industries backed by the British Business Bank.
“We look forward to working with Edge Investments, which has extensive experience in this sector and a proven track record. The creative industry is of increasing importance to the wider UK economy and we are particularly pleased that this fund will ensure these high-growth businesses have access to the finance they need to scale.”
The new fund will be formerly announced at the launch event for a new finance guide for the sector, Creative Industries – Routes to Finance. The new guide, jointly published by the ICAEW and the Creative Industries Federation, draws on insight and expertise from organisations across the creative industries.