£81.5 million regional SME investment vehicle is also supported by a West Midlands pension fund
UK-based Frontier Development Capital has secured commitments for its £81.5 million Evolution Fund, aimed at providing debt funding to small and medium-sized enterprises (SMEs) in the Midlands and the North to help them scale and grow.
Birmingham-based alternative fund manager FDC is part of Mercia Asset Management. Mercia registered the fund at Companies House on 6 March as Mercia Evolution LP.
On 8 April Mercia registered two LPs, British Business Investments Ltd, part of the British Business Bank (BBB), and Wolverhampton City Council, for an on behalf of the West Midlands Metropolitan Authorities Pension Fund (WMPF). Mercia Investments Ltd was added three days later.
The BBB and WMPF both committed £40 million to the fund.
Graham Mold, head of growth capital of Frontier Development Capital, said in a statement on Thursday: “It is still difficult for smaller firms to secure capital as many funders are unwilling to lend sums of under £10m or to support transactions involving SMEs. The Evolution Fund reinforces FDC’s commitment to regional businesses often underserved by traditional lenders.
“As no two deals are the same, it is also designed to meet the need for tailored SME funding. Our team’s ability to assess risk, structure investments and support resilient businesses makes FDC a valued funding partner.
BBB previously backed the FDC Debt Fund in 2020.
Adam Kelly, managing director and co-head of funds at BBB, added: “The British Business Bank is committed to increasing the supply and diversity of finance for smaller businesses. By backing experienced fund managers like FDC, we help improve access to finance for ambitious companies across the UK’s Nations and regions.”