The North West Fund - Investing in Small and Medium-sized Enterprises in the North West of England

1. The North West Fund LMC presentation 15th October 2012 MalcoLm Edge Interim Chairman Rory EarlEy Board member Cliff maylor Chief financial officer

2. The North WEst Fund A £170m fund to invest in small and medium-sized enterprises across the North West of England Funded by ERDF, European Investment Bank and BIS Created in 2010, and will continue to invest until December 2015 Has six sub-funds; Venture Capital, Development Capital, Loan, Energy & Environmental, Biomedical and Digital & Creative

3. Update on significant changes Strong investment performance this year, with some recovery of 2011 shortfall, except in Dev Cap fund; YFM contract ended commercially, and process for appointment of new fund manager commenced Revised business strategy produced Chief Executive and Chairman have resigned; new interim Chairman appointed Recruitment of new CEO and Board members commenced Marketing review completed

4. 2012 Performance As at the end of September £24m invested this year against a target of £24m 75 companies have received funding this year - 128 in total 5 out of 6 fund managers exceeding investment targets for this year £35.6m in total invested to date, Of which £5.6m invested in follow on funding into 26 companies 338 jobs created, 494 jobs safeguarded and 24 businesses created

6. Development Capital Fund Dev Cap sub-fund performance behind profile by £8.8M at Q3 Due to reduced investment timescale, fund to be reduced to £30m, with £25m for new investment New fund structure to be operational no later than January Need for the fund Large number of NW businesses in eligible sectors Average number of new applications to the fund 20-25 per month Strong demand for loan type finance of between £250k-£500k Need to support the more established businesses in the NW to stay competitive Fund still required to service EIB loan Major contributor to output targets

7. Rationale for £155m fund 127,300 SMEs in the North West operating in ERDF eligible sectors. Lack of finance available to SMEs – 33% of SMEs applying for loans from banks have been rejected Five of the funds expect to be fully committed significantly before end of 2015

8. Outputs achieved to date

9. Value for Money The qualitative and quantitative impacts of the fund are:- Growing reputation of the North West as a place to do business Providing SMEs with access finance Securing additional funding by attracting private funders. Supporting spin outs from university and encouraging entrepreneurial activity Development of North West Key sectors: Bio-Med, Digital & Creative, Energy and Environmental Creating a legacy fund for reinvestment post 2015 Additional Business support offered

10. Revised approach Better stakeholder engagement Monthly 121 meetings with fund managers Strengthened board structure and governance Pro-active fund manager management • Monthly 121 meetings with fund managers • Closer working relationships • Investment targets closely managed • Forecasting more realistic Marketing approach to revised and recommendations from marketing review to be implemented. costs reduced at holding fund level. Fund managers to meet their marketing commitments

11. Key milestones Recruitment firm being appointed for CEO and Chairman appointments; appointments to be made by December, with significant stakeholder input Mini-competition proposals for reduced development capital fund due end of October, with appointment made by end of November 150th investment completed by December 2012 Revised marketing strategy produced by December 2012 £50m of investment completed by end of April 2013

12. Thank you