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Fy Launch Sheffield Slides

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  • 1. Finance Yorkshire Welcome www.finance-yorkshire.com
  • 2. Finance Yorkshire James Newman - Chairman www.finance-yorkshire.com
  • 3. Finance Yorkshire Agenda www.finance-yorkshire.com
    • Alex McWhirter – Assistant Director for Business, Yorkshire Forward
    • James Newman – Chairman, Finance Yorkshire
    • Jonathan Dixon - Acting Chief Executive, Finance Yorkshire
    • Ed French - Seedcorn Finance
    • Tony Goulbourn - Business Loans
    • Marion Bernard - Equity Linked Finance
    • Questions & Answers
  • 4. www.finance-yorkshire.com Yorkshire Forward Alex McWhirter - Assistant Director for Business
  • 5. Finance Yorkshire James Newman - Chairman www.finance-yorkshire.com
  • 6.
    • Mission
    • To build a permanent regional fund by contributing to the success of SME’s constrained by finance
    • Vision
    • Successful and growing financial investment institution
    • Recognised and respected as a key participant in the SME business and professional sectors
    • Stimulating demand for finance in our key market segments
    • Realising good returns for investors and value for money for sponsors, Government and Yorkshire Forward
    www.finance-yorkshire.com Finance Yorkshire Our Mission and Vision
  • 7. Finance Yorkshire The evidence
    • The experience and evaluation of previous investment funds
    • The track record of PIF and SYIF
    • Yorkshire Forward ’ s development agenda
    • The effect of reduced availability of finance from commercial lenders
    • Recent recession
    www.finance-yorkshire.com
  • 8. Finance Yorkshire The approach
    • Working alongside the commercial market ;
    • Maintaining and developing relationships with financial intermediaries to promote awareness and dealflow
    • Market making effect, making deals happen by spreading the risk with other investors and lenders
    • Co-investing with other funds
    www.finance-yorkshire.com
  • 9. Finance Yorkshire The approach
    • Working in partnership with;
    • Business Link Yorkshire
    • Connect Yorkshire
    • Yorkshire Forward – sector teams and innovation
    • Enterprise Agencies
    • Chambers of Commerce
    • Local Authority initiatives
    www.finance-yorkshire.com
  • 10. Finance Yorkshire Board
    • James Newman
    • Alex McWhirter
    • David Bagley
    • Ian Kelly
    www.finance-yorkshire.com
    • Jennie Adams
    • John Watson
    • Peter Myers
    • Tony Parsons
  • 11. Finance Yorkshire Jonathan Dixon - Acting CEO www.finance-yorkshire.com
  • 12. Finance Yorkshire PIF & SYIF
    • Finance Yorkshire will build on the success of PIF and SYIF
    • PIF and SYIF in portfolio phase
    • PIF and SYIF will become subsidiaries of Finance Yorkshire
    • - separate fund managers
    • - administered as separate companies
    • - separate legacy funds
    www.finance-yorkshire.com
  • 13. Finance Yorkshire Fund breakdown £90m Investment Capital £30m European Regional Development Fund £15m Yorkshire Forward – Capital £45m European Investment Bank (JEREMIE) £10m Yorkshire Forward – Revenue www.finance-yorkshire.com
  • 14. Finance Yorkshire Sustainability and legacy www.finance-yorkshire.com
    • Legacy fund to be invested in region ’ s businesses in line with original objectives
    • To be utilised after 2019
    • Eventually aggregated with PIF and SYIF legacies
  • 15. Finance Yorkshire C ustomers
    • SME’s paying business rates in Yorkshire and the Humber or relocating to the region
    • A new start or growing business
    • A business with growth potential
    • A business unable to source its full funding requirement from the commercial market
    www.finance-yorkshire.com
  • 16. Finance Yorkshire Three portfolios
    • Seedcorn Finance (up to £780k) £15m
    • Business Loans (£15k – 150k) £27m
    • Equity Linked Finance (£100k - £2m) £48m
    www.finance-yorkshire.com
  • 17. Seedcorn Finance Ed French www.finance-yorkshire.com
  • 18. Seedcorn Finance Team www.finance-yorkshire.com www.finance-yorkshire.com
    • Ed French – Fund Manager
    • Michael Bakewell - Regional Director
    • Ashwin Kumaraswamy – Investment Manager
    • AN Other - TBA shortly
  • 19. Seedcorn Finance Objectives www.finance-yorkshire.com
    • Yorkshire potential
    • Impact of “Beacon Companies”
    • Challenge- 10-15 Beacon Companies
    • Importance of Legacy
    • What it isn’t..!
  • 20. Seedcorn Finance Investment type www.finance-yorkshire.com
    • Starting low £15-£100k sometimes
    • Investments up to £780k
    • Investments of £2m+ when syndicating with other funds
    • Fast (4 yr fund)
      • Self sustainable companies in 2-3 yrs
      • Exit in 3-5 yrs
  • 21. Seedcorn Finance Target investments www.finance-yorkshire.com
    • Pre-revenue or early-revenue
    • “ Huge” market opportunity
    • Competitor barriers at exit
      • Patents, Data lock-in, Approvals etc.
    • Management open to “change and growth”
  • 22. Seedcorn Finance Process www.finance-yorkshire.com
    • Lightweight - enquiries via website www.finance-yorkshire.com
    • Very simple application form, then conversation
    • Variable timing (1-12 months)
    • Technology Entrepreneur Loans
      • Fast, ~£80k, simple legals, 6-12 month phase, low dilution
  • 23. Seedcorn Finance Case study 1 - Iceotope www.finance-yorkshire.com
    • How it started
    • What has happened
    • Where we hope it will go
  • 24. Seedcorn Finance Case study 2 - Tangentix www.finance-yorkshire.com
    • How it started
    • What has happened
    • Where we hope it will go
  • 25. Seedcorn Finance Summary www.finance-yorkshire.com
    • Great potential in Yorkshire
    • Creating technology beacon companies
    • Focus on highest growth opportunities
  • 26. Business Loans Tony Goulbourn www.finance-yorkshire.com
  • 27. Business Loans Objectives www.finance-yorkshire.com
    • Objective – to provide gap funding
    • To work collaboratively with intermediaries: public and private
    • Commercial lending designed to achieve growth and economic impact
  • 28. Business Loans Products www.finance-yorkshire.com
    • Fixed rate loans between £15,000 - £150,000
    • Terms up to 5 years
    • Interest rate rebates available
    • Financial packaging with other forms of debt finance including the Enterprise Finance Guarantee
  • 29. Business Loans Types of deals www.finance-yorkshire.com
    • Financial Gaps
    • Working Capital
    • Innovation Project with rapid growth
    • Asset Based Lending (property and fixed assets)
    • Import and Export
  • 30. Business Loans Our approach www.finance-yorkshire.com
    • Two Teams: North & South covering the whole region
    • Experienced Investment Managers in the team
    • If you have client seeking finance and there is a gap – pick up the phone or email
    • Look at the website – www.finance-yorkshire.com
  • 31. Business Loans Case Study 1 – A manufacturer of heavy plant www.finance-yorkshire.com
    • This company won a £1m contract to design, build & export a piece of plant
    • The buyer paid £350k with the order – but in return the company had to provide a bank guarantee to cover this advance payment
    • Without this guarantee the UK bank could not release the £350k
    • They had existing overdraft facilities & could secure invoice discounting facilities but they had a security gap of £100k to cover the APG
  • 32. Business Loans Case study 1 – A manufacturer of heavy plant www.finance-yorkshire.com
    • Discounting facilities but they had a security gap of £100k to cover the APG
    • We agreed a £100k advance to be deposited with the bank to act as part collateral to secure the advance payment guarantee
    • We agreed full repayment from the second payment from the buyer – which occurred once the plant was operating on site abroad – which took 3 months
  • 33. Business Loans Case study 2 – A brewery www.finance-yorkshire.com
    • This profitable company wished to double its brewing capacity
    • That meant an extension to the factory – and disruption and cashflow issues whilst the new brewplant was imported, commissioned & trialled (for taste)
    • They had modest banking facilities, but the new brewplant was difficult to fund as it had little residual value, and was coming in from another country
  • 34. Business Loans Case study 2 – A brewery www.finance-yorkshire.com
    • The alterations were being made to a leased premises – so little value to any lender
    • We helped the brewer to specialist advice – which led to the business receiving grant assistance from Yorkshire Forward. We then agreed to lend the remaining gap so the plant could be purchased & commissioned
    • In time the new plant was commissioned & began to produce beer of an identical taste – and the brewery were then able to deliver significant turnover growth leading to new jobs
  • 35. Equity Linked Finance Marion Bernard www.finance-yorkshire.com
  • 36. Equity Linked Finance Objectives www.finance-yorkshire.com
    • £48m to be invested by 31 Dec 2013
    • Start ups, growth, development capital or expansion
    • £100k - £1m in equity and mezzanine instruments
    • Joint equity linked packages up to £2m
    • In all eligible sectors
    • Across the Yorkshire and Humber region
  • 37. Equity Linked Finance Objectives www.finance-yorkshire.com
    • Detailed commercial assessment of opportunity
    • Management, management, management
    • Products, market, financials (P & L, B/S, cash)
    • Source and use of funds
    • Value growth and exit planning (within 5 years)
  • 38. Equity Linked Finance Our approach www.finance-yorkshire.com
    • Enquiries via website www.finance-yorkshire.com
    • Business plan – full commercial assessment
    • Investment team – to be announced shortly
    • Approach – supportive, professional, focused
    • Objectives – quality deals, generating legacy returns
  • 39. Equity Linked Finance Case study 1 - Excelsyn www.finance-yorkshire.com
    • Combined equity and mezzanine financing package
    • Alongside bank finance and Endless LLP
    • Invested 2007 raising £2m in equity finance
    • NXD position, strategic and operational involvement
    • Trade sale to Albany Molecular Inc in 2010
    • 31% IRR achieved for Legacy Funds
  • 40. Equity Linked Finance Case study 2 - Tanfield www.finance-yorkshire.com
    • Combined equity and mezzanine financing package
    • Alongside bank finance, Hotbed and angel investors
    • Invested 2006 raising £2.3m equity finance
    • Recruited new NXD, close involvement in business
    • Raised further €4.3m from Inventages in 2010
    • Retain Observer rights to Board, assisting growth
  • 41. Equity Linked Finance Working together www.finance-yorkshire.com
    • Seeking out all viable opportunities
    • Working in partnership with all regional players
    • £48m funding for SMEs
    • Only for Yorkshire and Humber, and new to region
    • Make the most of it!
  • 42. Finance Yorkshire Jonathan Dixon - Acting CEO www.finance-yorkshire.com
  • 43. Finance Yorkshire Location 1 Capitol Court Capitol Business Park Dodworth Barnsley S75 3TZ www.finance-yorkshire.com
  • 44. Finance Yorkshire Timetable www.finance-yorkshire.com
    • Funds complete at end of March 2010
    • Open offices at Capitol Court 5 th April 2010
    • First investment April 2010
    • Open for enquiries now………
  • 45. Finance Yorkshire A pplication process www.finance-yorkshire.com
    • Call us to make sure it’s eligible 0845 649 0000
    • Get the applicant to complete the Application Form (download from www.finance-yorkshire.com )
    • Send the completed Application Form & the supporting information to Finance Yorkshire
  • 46. Finance Yorkshire Q & A www.finance-yorkshire.com