Maven's equity remit is the test in BBB's £210m fund
The new South East Investment Fund opens with a £250,000 loan to Basingstoke-based Process Vision; the larger question is whether Maven can close the gap between a region with 17% of UK university spinouts and 5% of equity investment.
The British Business Bank has launched a £210m South East Investment Fund, the latest vehicle in its plan to deliver targeted finance to every UK nation and region outside London, with FSE Group running the debt book and Maven Capital Partners responsible for an equity remit that will determine whether the fund does more than lend. Alternative Credit Investor reports the first investment is a £250,000 loan to Basingstoke-based technology company Process Vision to support international expansion.
The bank says the fund will make loans between £25,000 and £2m and equity investments up to £5m to help small and medium-sized businesses start, scale and grow. Incoming interim chief executive David Hourican, in the launch announcement, described the South East as home to some of the UK's most innovative technology and science businesses and said the fund gives companies local access to the finance they need to expand.
The vehicle covers Buckinghamshire, Oxfordshire, Berkshire, Hampshire and the Isle of Wight, Sussex, Surrey and Kent, and it will not be the last: the British Business Bank has said an East of England Investment Fund will follow later this month.
The case for the fund rests on an uneven distribution of capital: the South East is home to 17% of the UK's university spinouts, second only to London, yet it attracted just 5% of the UK's equity investment by value last year, meaning the region is generating research-backed businesses faster than it is holding onto the capital required to build them.
The first disclosed investment is instructive precisely because it leaves that imbalance untouched. A loan to Process Vision validates the debt side and gets the fund moving quickly, but it does not test whether Maven can turn the region's spinout density into equity positions.
The equity deployment record will tell. If Maven's tickets begin landing in the region's university spinouts, the fund starts to address the 17%-versus-5% gap; if the visible deal flow stays on FSE's debt side, the bank will have built a lending programme rather than a solution to the gap it has itself flagged.
The Wrap