A new £20 million fund has been launched to fill the gap left by the South West Ventures Fund, which will receive no further government cash.

A new £20 million fund has been launched to fill the gap left by the state-backed South West Ventures Fund, which can no longer make new investments.

Somerset-based Horatio Investments is privately backed and led by former Hargreaves Lansdown man Martin Bowles and Andrew Maynard, who used to manage the South West Ventures Fund.

Bowles comments, ‘The South West Ventures Fund has been an excellent source of funding for businesses in the region and continues to do a great job managing its portfolio. However, having now reached the end of its investment period and not able to make new investments, there is a funding gap for small businesses in the South West.’

The funding gap is exacerbated by the fact that ‘the budget for RDA [regional development agencies] has slumped 20 per cent‘, Bowles adds, and because ‘banks aren’t lending’ to businesses in the South West of England that need funding to grow.

Horatio Investments will back businesses across all sectors and at all stages, from seed capital to buy-outs. It will invest between £100,000 and £500,000 in start-ups.

The firm will look for businesses with ‘a detailed plan to achieve strong, sustainable growth in profits’ and the ability to exit its investment within three to ten years.

Further details are available on Horatio’s website.