Business angel helps look for growth firms; New £50m pot could boost N Wales SMEs

DRAGON. Business angel. Entrepreneur. Whatever label you attach to Peter Saunders there's no getting away from the fact that he knows a thing or two about investing in promising ventures.

 

He's got a proven track record with early stage companies in North Wales – building businesses up and selling them on when the time is right.

 

That's why people are sitting up and paying attention when he says he believes a new £50m fund could play an essential part in helping grow companies in the region. 

 

Saunders is an associate partner with Wales Fund Managers' WestBridge SME Fund which is expected to be formally launched in the summer.

 

The fund is aiming to raise £50m by mid 2010 for investment in established, profitable companies in England and Wales. It is envisaged that at least £15m of the fund will be invested in Welsh companies.

Saunders told Business Post: "I am an associate partner of the fund and have made an investment in it.

 

"I was very impressed with the calibre of the team at WestBridge. They all have a proven record of success in this field in supporting and providing finance for SMEs.

 

"This is an area that is just so important to the Welsh economy. As we know a huge proportion of businesses in Wales are SMEs.

 

"As we come out of recession the recovery will be led by the SMEs, rather than the corporate giants. That's because small companies are flexible and can adjust better to the economic conditions they find themselves in."

 

He added: "A lot of growth companies – even those which are successful – are finding it hard to raise finance these days. Therefore private venture capital finance is very important.

 

"The £50m in the WestBridge fund will come from a mix of private investors including banks.

 

"I see my role as to help connect this high calibre team with Wales. They are very keen to do business in Wales."

 

The WestBridge team will be tapping into Saunders' extensive knowledge and expertise of early stage companies in North Wales. He is an active private investor with a portfolio of early stage companies in sectors ranging from al-ternativenergy to digital asset storage to leisure. But he is still perhaps best known for his former involvement over many years with Gwynedd-based snack bar manufacturer Halo Foods.

 

Halo Foods was sold to Nestle Rowntree but was later bought back by Saunders with support from venture capitalists 3i. After a renewed period of growth, he sold the business again.

 

He then established Severn Aviation to provide advanced training for helicopter pilots flying for police forces and for the North Sea oil and gas industry. Severn was acquired after just two years by the US based Bristow Group last December.

 

"I have acted as a business angel – or dragon as it is more commonly known these days – and in that capacity I have invested in small and start up companies such as Tywyn-based True Energy and its sister company Bright Light Solar.

 

"One of the aspects of my role with WestBridge will be sit on the board on some of the companies, not to look after the day-to-day management of those businesses, but to provide strategic guid-ancat board level.

 

"This new fund is not just about providing the equity. It is also using its knowledge and expertise and contacts to help the businesses develop."

 

Wales Fund Managers (WFM) said it was the only independent private equity firm in Wales, and specialised in backing SMEs across the UK.

 

It said its new WestBridge SME Fund will be suitable for both traditional institutional investors and certain high net-worth individuals.

 

"WFM's shareholders are convinced that SME firms are best placed to grow in the current market, and will be personally investing 5% of the Fund, up to a maximum of £2.5m. WFM already has a strong pipeline of investment opportunities," said the company.

 

WFM invests between £1m and £5m in established, profitable companies. Saunders said he thought WestBridge would to a large extent complement what Finance Wales, the investment arm of the Welsh Assembly Government, is doing.

 

"Finance Wales largely does deals up to £2m. WestBridge will look at making investments from £1m to £5m."

 

Guy Davies, WFM chief executive, said: "Being the only fund of its kind in Wales, we are looking forward to working with the people we have met and who are supporting the development of our business."

 

Frank Holmes, senior partner in Gambit Corporate Finance, said: "For a long time, the local market has waited to see a local private equity investor focusing on equity investments up to £5m.

 

"This will open up opportunities for SMEs to receive the backing of equity investment with quality and quantum supported by a high calibre team.

 

"The Wales Fund Managers team comprises extremely experienced investors with a strong track record of creating value in this segment."

 

Roy Bichan, a leading figure in the North Wales business community, has been involved with WFM for about a decade and is helping put the deal together.

 

He said WestBridge was the "largest private equity fund other than Finance Wales that has ever been raised and headquartered in Wales".

 

"Nothing this big has been attempted in the private sector before," he added. "I am sure there are growth companies in North, mid and South Wales that could benefit from this fund."

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