BGF launches largest ever growth capital fund for Irish businesses

BGF launches largest ever growth capital fund for Irish businesses

  • A new €250 million fund backed by ISIF, AIB and Bank of Ireland

Tuesday 14th November 2017

BGF will today launch the largest ever growth capital fund dedicated to Irish small and medium-sized companies. The fund which will have up to €250 million to invest is backed initially by the Ireland Strategic Investment Fund (‘ISIF’), AIB, Bank of Ireland and BGF’s existing shareholders. The fund will be run by a new, dedicated BGF team based on Merrion Square in central Dublin. Leo Casey, former director and board member with IBI Corporate Finance, will lead the team which on day one comprises David Gammie, Joe Higgins and Maedhbh O’Driscoll, and which BGF will expand further in 2018.

BGF provides initial investments of between €2 million and €10 million in return for a minority stake, with additional funding to investee companies as needed. The businesses it backs typically turn over between €5 million and €100 million a year and have a strong management team in place.

BGF, set up in 2011, is now the UK’s most active investor in growing businesses and has backed more scale up companies in that market than any other investor. In Ireland, BGF has similar ambitions to influence the funding landscape and will provide long-term equity investments to small and mid-sized businesses planning to scale up their operations.

Over the past six years, BGF has invested in nearly 200 businesses in the UK, including technology companies, manufacturers, recycling firms, housebuilders, retail chains and more. These businesses collectively generate revenue of over £3 billion and employ more than 28,000 people.

Stephen Welton, CEO of BGF said: “BGF exists to enable entrepreneurs and management teams to realise their ambitions by helping them to scale up and reach new heights. Along with capital we bring knowledge, resource and patience. So far, this approach has achieved phenomenal results and we can’t wait to bring this model to Ireland’s immensely exciting entrepreneurial landscape”.

“We will be making investments from a new commitment of up to €250 million, which has been funded initially by ISIF, AIB and Bank of Ireland, as well as BGF’s own shareholders. It goes without saying that these partners provide a tremendous endorsement and that their investment and support will be crucial to our Irish success. Together, we share a belief that you make things happen, you don’t wait for them to come along.”

Leo Casey, Head of Republic of Ireland for BGF said: “There are many businesses across Ireland that can benefit from the type of long-term capital that BGF provides. Over the past 20 years, I have worked with many diverse companies here – from family-run firms to high-tech innovators and professional services companies – and many share the same aspirations to grow their company without losing control.”

“I’m looking forward to working with ISIF and the banks to introduce our approach to advisers and intermediaries, and to working directly with entrepreneurs and management teams in leading Irish businesses.”

Eugene O’Callaghan, Director of ISIF said: “The patient equity funding that BGF provides will address a significant gap in the funding landscape for Irish SMEs. Judging by BGF’s success in the UK, we expect that it will attract significant interest from Irish entrepreneurs and family businesses. We are very pleased to be supporting BGF’s entry into the Irish market.”

Ray Fitzpatrick, Head of Equity Investment Unit, Specialised Finance, AIB said: “AIB is pleased to support BGF in providing Irish SMEs with access to equity investment to help them finance their business growth and the employment growth that comes from that. It’s an important part of the finance ecosystem for ambitious Irish companies seeking to expand their business.”

Michael Lauhoff, Director of Business Banking at Bank of Ireland commented: “We welcome BGF’s entry to the Irish market as it presents an opportunity to strengthen the balance sheets of emerging Irish businesses, allowing them to expand and develop, funded by partners such as ourselves. We look forward to working collaboratively with the BGF team to maximise the growth potential of our mutual and prospective clients.”

Welcoming the BGF announcement, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD said: “As SMEs are such a critical component of Ireland’s economy I welcome today’s historic announcement by the Ireland Strategic Investment Fund (ISIF), and BGF along with AIB and Bank of Ireland of the largest ever growth capital fund dedicated to Irish SMEs.

“Access to finance is crucial in all businesses and Irish SMEs looking to grow will now have access to a significant long-term, patient capital investor with funding of up €250 million available. In line with ISIF’s mandate, I welcome this development as a driver of economic growth and job creation in this key sector of our economy.”

“I wish Leo Casey and his team here in Dublin well in their activities in support of growing Irish businesses.”