Venture capital fund raises £33m more for business in poor areas
New Start magazine
The UK’s first community development venture capital company has raised £33m towards a new fund to boost businesses in deprived areas.
The fund, known as Bridges Community Development Ventures II (Bridges CDV Fund II), will make equity investments in growing businesses with strong social benefits. It will also target management buy-outs, buy-ins and property backed businesses.
Although it is ultimately aiming for a fund of £40-£50m it has now reached its ‘first close’: the legal point in time when investors are bound into the fund and Bridges can draw down the first tranche of money and make its first investments.
Investors include Barclays Business Banking, international financial conglomerate Citigroup, the West Midlands Pension Fund, a number of trusts and foundations including educational trust Shine and the R and S Cohen Foundation (Sir Ronald Cohen’s family foundation) as well as a number of individuals.
Bridges managing director Philip Newborough said: ‘Raising a second fund is a crucial test for any young private equity company. The first close of our second fund shows that investors are attracted to our unique approach of investing in businesses in deprived areas to generate social as well as financial returns.
‘This first close underlines our confidence that these types of funds can be successful, attract investors and that they are going to grow in the future.’
The company was founded in 2002 by the founder of high street fashion chain New Look Tom Singh, Sir Ronald, co-founder and former chair of private equity investment group Apax Partners (which currently owns part of New Look), and venture capital company 3i.
The first Bridges CDV fund, launched in 2002, raised £20m of private investment which was matched by the Department of Trade and Industry. Bridges said the fund was already beginning to show attractive financial and social returns. Harlands, a specialist label maker, secured investment under the original Bridges fund. By the time it was sold, it had tripled the fund’s investment and safeguarded 50 jobs in one of the most deprived areas of Hull.
Details: www.bridgesventures.com or call 020 7262 5566.