Midlands investors still have the desire to invest in SMEs despite the economic conditions, the head of equity capital firm Catapult Venture Managers has said.
Managing director Rob Carroll said that while the banks have pulled back from new lending there are still funds available in the Midlands to support SMEs and that his firm has still got a pipeline of investment opportunities, despite it being on a smaller scale from last year.
He said: “Our £30m Catapult Growth Fund, which was launched in early 2007, has already invested £5.8m into businesses primarily in the Midlands region and can provide funding for up to £2m of development capital or finance for MBOs and BIMBOs.”
He said that Catapult Venture Managers had had a record-breaking year in 2008, bucking the gloomy economic outlook in the second half of the year and the credit crunch.
“The economy may not be in great shape but we continue to invest in well-run businesses and our doors are well and truly open for business. Catapult enjoyed its most buoyant third quarter ever, completing 11 transactions during this period.
“Our transactions during 2008 have included the multi-million pound buy-out of BWB Consulting, a significant development capital investment into e-learning specialist AtlanticLink Limited; and an early-stage investment into CellAura Technologies.
“The second half of 2008 saw a general slide in the well-being of the UK economy and this had a major impact on confidence. However, we continued to invest, including £850,000 into Key Technologies as part of £1.8m being raised through flotation on virtual trading platform Investbx.
“Clearly 2009 is appearing gloomier than ever with Gordon Brown’s close ally Ed Balls, the Children’s and Schools Secretary, saying this week that the downturn was likely to be the most serious for 100 years.
“In such circumstances both individuals and organisations are going to be more averse to risk but we are continuing to work with banks that are still prepared to lend.
“Catapult continues to back businesses with good management teams and we are prepared – as the banks pull in their lending ‘horns’ - to increase our investment where appropriate. More than ever, companies need to be realistic when it comes to pricing. In these turbulent economic waters, companies need to have well-structured finances in order to attract finance. Businesses burdened with too much debt are unlikely to be successful.”