The City's only West Midland-focussed investment vehicle has enjoyed its first day of trading on Ofex.
Investment West Midlands, headed by two prominent members of the Birmingham's financial community John Wheatley and Gordon Harvey, raised a total of £225,000 at 3p per share.
The fund will seek to make a reverse acquisition or investments focusing only on the West Midlands region, using a combination of cash, shares and convertible loan stock.
The directors intend to target private companies across all sectors which have growth potential and are cash generative.
It said it would be focussing on firms which had good managment and where the owners of the business would accept a significant part of the consideration in shares.
The value for IWM shareholders is intended to be created through leveraging client, product and cost synergies through to a higher price/earnings ratio for the company.
It said benefit for target companies will be a greater profile through being part of a company whose shares are traded on Ofex and possible future intersubsidiary cross selling opportunities.
Mr Wheatley, aged 54, is chairman of Cradley Group Holdings, an AIM listed printing group, and also worked as an partner at KPMG until 1998 when he set up his own practice.
He said the experience and contacts that he developed at KPMG made him particularly well placed to assess acquisition targets in the West Midlands.
Mr Harvey, aged 62, is chairman of AIM Venture Capital Trust and a divisional director and investment manager of the stock broking firm Gerrard.
He became a member of the Birmingham Stock Exchange in 1966 and has continued to manage private client portfolios in addition to experience in bringing companies to public share offerings.
He is also chairman of Margetts Holdings which operates as a successful unit trust management company as well as being an independent financial adviser.
Mr Wheatley, executive chairman, said: "We are very pleased by the response from investors and are excited about the opportunities ahead for the company.
"We have already identified a number of exciting, potential investments in the West Midlands region and look forward to reporting on our progress to our new shareholders in due course."