The success of the Business Growth Fund (BGF) will be measured on whether it is around in ten years time, according to chief executive Stephen Welton.
Speaking at a seminar hosted at Chartered Accountants’ Hall by the Institute of Chartered Accountants in England and Wales (ICAEW), Welton said that the BGF is looking to create an institution that will stand the test of time.
Having already completed four investments, including Unruly, Benefax, Statesman and GCI Com, since its formation in October 2010, the £2.5 billion fund is reportedly on course to invest in 20 companies in 2012, and 30-40 investments per year on a ‘sustainable basis’ in the longer term.
Flanked by investors including Mike Chalfen, general partner at Advent Venture Partners, and Kit Hunter Gordon, chairman of Seraphim Capital, Welton stated that the fund is looking towards the future and that the solution to financing small and medium-sized businesses ‘will not happen in a few months’.
In outlining the approach taken by the BGF, Welton said that investment teams have to be local, with entrepreneurs favouring those that are ‘plugged into the local community’.
The focus of the BGF, Welton reported, is to be a junior partner, acquiring a minority stake in businesses with a vision towards the ‘long-term growth potential’.
With new deals expected to be announced in the next week, Welton commented that the fund’s due diligence process will become more efficient and focused as it develops.
However, for future BGF investments, Welton added that a lot of companies are coming forward and demand is good: ‘The challenge is to satisfy that demand,’ he added.