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Competitive Regions – shaping best practice Sheffield, 9 October 2003

Competitive Regions – shaping best practice Sheffield, 9 October 2003. Presentation on Support to SMEs. Background. Launched in 1996 as a unique £25m fund Private sector/public sector partnership Central to Objective One Programme

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Competitive Regions – shaping best practice Sheffield, 9 October 2003

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  1. Competitive Regions – shaping best practice Sheffield, 9 October 2003 Presentation on Support to SMEs

  2. Background • Launched in 1996 as a unique £25m fund • Private sector/public sector partnership • Central to Objective One Programme • Proven Demand for gap finance in the SME marketplace

  3. Structure • Company Limited by Guarantee • Stakeholders -Bank of England, Chamber Of Commerce, MSIF Partners • Private Sector investors plus ERDF • MSIF Board of Directors (non-executive) • Fund Management (executive)

  4. MSIF’s Role on Merseyside • To help businesses get started or expand • Improve the Merseyside economy • Create and save jobs

  5. Track Record – Objective One Programme 1993-99 • £32m successfully invested • 600 businesses backed • 5000 jobs created or saved • £88m private sector money levered in • MSIF model replicated in South Yorkshire, Wales and Cornwall

  6. £80m for Merseyside Businesses Objective One Programme 2000-2006An £80m fund • ERDF £ 36m • Barclays Bank £ 22m • Merseyside Pension Fund £ 22m

  7. Targets • Support 1,000 businesses • Create 7,500 jobs • Preserve 5,200 jobs • £150m private sector leverage • Make commercial returns to ensure sustainability

  8. Types of Support Available • Loans • Loans with an equity-based premium • Venture Capital • Management Support NO GRANTS • Up to 50% of the total amount needed

  9. What we look for • Strong, balanced management team • Commercial Viability • Committed, capable and focused leadership • Quality Business Plan • Great ideas, innovation, unique product or service, proven demand

  10. Situations in which we Operate • Start-ups • Businesses needing working/development capital • Rescue – out of receivership • MBOs, MBIs • Syndicated deals

  11. Small Firms Fund£20M • Loans £3k to £100k • Fixed interest rates • Interest Rebate – one third • Business support post investment • Sole traders, partnerships, limited companies

  12. Mezzanine Fund£20M • Loans £100k to £1m • Floating interest rate • 33% interest rebate • Exit premium • Support via Non-Exec Directors • Limited companies only

  13. Venture Fund£40M • Equity up to £2m • Business support post investment • Limited Companies only

  14. Why the model has worked • Established market need – products tailored to those needs • Partnerships/Relationships/Profile • Management Support • Terms of deal balance business needs with commerciality

  15. Fund Management • Alliance Fund Managers - newly established fund management company • £123 million under management – now one of UK’s largest regional fund managers • Culture and approach

  16. THE VISION • A lasting institution to serve SMEs • Plugging a growing “funding gap” • Working with local partners • Targets in the perceived growth sectors • Continued value for money within Objective One Programme

  17. Questions and Answers

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