EU Growth and Jobs Fund Conference - EU Investment for Growth and Jobs Programme - William McCulla

1. InvestNorthernIreland
StakeholderEvent:EUInvestmentforGrowthandJobsProgramme
June2015
Business Advice Clinic
www.investni.com

2. ERDF ex ante assessment
• An Ex-Ante Assessment of Financial Instruments was completed by RSM
McClure Watters in March 2014 for DETI.
• Concluded that the existing Invest NI Access to Finance continuum, was suitable
to address the areas of identified market failure for high growth potential NI
SMEs:
– additional to the baseline supports
– leveraging private sector investment and sharing risks with the private sector.
– builds awareness and capacity of SMEs to access alternative forms of
finance
– complements grants for research and development; particularly at a seed /
early stage
• The report recommended that ERDF funding was used to support these
initiatives leveraging up to £188m for the period 2014-2023 to help
address the equity funding gap.

3. ERDF designated to Equity Funds
• The RSM McClure Watters Ex Ante Assessment recommended the
following ERDF, Public and Private sector match for the period 2014-2023.
• Although eligible for ERDF funding, this is a finite pot and c£65m at today’s
exchange rates has been allocated to Financial Instruments. The balance is
largely expected to be made up by utilising recycled returns.
ERDF
Other
Public
Private Total
University spin outs £3.6m £2.4m £0.0m £6m
Seed/early stage fund £23m £3.8m £11.5m £38.4m
Co-investment funding £23.9m £0.0m - £27.3m £51.2m
Development stage £46.0m £0.0m - £46.0m £92.0m
Totals £96.5m £6.2m £84.8m £187.6m

4. Access to Finance Solutions
– A Risk Capital funding continuum – from £1k start up capital to £3m development capital.

5. Performance for FY 2014/15
• In 2010, Invest NI created a suite of funds which now totals more than £170 million
to help SMEs with high growth potential to forge ahead and drive rapid growth
within their business.
• These funds, a mix of loans and equity finance, are helping to fill the funding gap
that has been created by a tightening of bank lending and changes to EU grant policy.
We have been able to do this with part financing from the European Regional
Development Fund.
• 2014/15 is the first full year that all elements of our Access to Finance initiatives have
been available with performance for the year summarised below.

6. Development Fund I
Development Fund II
Funds and Fund Managers
Loan
Equity

7. Selection of Investee Companies• £5m fund was launched in February 2013
and is administered by Ulster
Community Investment Plc (UCI).
• Fund is aimed at Micro, SMEs and social
enterprises and provides loans of between
£1k and £50k on a typically unsecured
basis, at commercial interest rates.
• Start-ups are also able to avail of
business mentoring support.
• Performance for FY 2014/15
£1.7m across 74 deals
• Contact
www.nisblf.com | 0800 9882879

8. Selection of Investee Companies• £50m fund was launched in June 2012 and
is administered by WhiteRock Capital
Partners LLP.
• Fund targets deal sizes of £50k-£500k with
key emphasis on supporting SMEs that can
demonstrate growth and export potential.
• Loans are typically unsecured with
commercial pricing representing a blend of
margin and profit share.
• Performance for FY 2014/15
£18.8m across 36 deals
• Contact
www.whiterockcp.co.uk | 028 9500 1060

9. Selection of Investee Companies• Fund was launched in July 2014 and is administered by
Pentech Ventures LLP.
• It represents an integrated suite of funds and support for
entrepreneurs, seed and early stage SMEs and university
spin-outs:
a) £13m SME Equity Fund which provides seed capital
investments of £50k-£250k.
b) Two £1.5m university funds (£3m) each providing
capital to university spin-outs via investments of £50k-
£250k.
c) £7.6m Proof of Concept Grant Fund provides grants
of up to £40k to help commercialise technology
innovation.
d) Investment Awareness Programme which provides
mentoring/workshop support to help prepare
entrepreneurs for the issues that will face them in
establishing a high growth business.
• Performance for FY 2014/15
£3.3m across 79 deals
• Contact
www.techstartni.com | 028 9032
5506

10. Selection of Investee Companies
• £28m fund was launched in June 2011 and is
administered by Clarendon Fund Managers
• Fund co-invests alongside business angels and
other private investors with view to encouraging angel
development and accelerating syndication.
• The angels / private investors lead the deal and set
the terms with typical deal size between £150k and
£1m
• Performance for FY 2014/15
£9.2m across 24 deals
• Contact
www.cofundni.com | 028 9500 1060

11. Selection of Investee Companies• £60m fund was launched in October 2013
and is administered by Kernel Capital (£30m)
and Crescent Capital (£30m).
• Completes the dealflow chain given the equity
gap in venture capital.
• Performance for FY 2014/15
£4.2m across 6 deals
• Contact
www.kernel-capital.com | 028 9042 8367
www.crescentcapital.co.uk | 028 9023 3633
Development Funds

12. • Further information is available within the Access to Finance section of the Invest NI website:
www.investni.com/support-for-business/funding-for-business/access-to-finance-strategy.html
• This site includes further background on the various funds as well as links to other valuable
publications.
• Contact Details for Invest NI Corporate Finance team:
William McCulla – 028 9069 8697
Sinead Magee – 028 9069 8678
Gillian McKenna – 028 9069 8677
Damien Mullan – 028 9069 8788
Annesley Harrison – 028 9069 8465
Joanne McStay – 028 9069 8059
Further Information / Contact