A NEW venture capital fund aimed at supporting small and medium-sized enterprises in Wales will be launched this summer.
Cardiff-based Wales Fund Managers (WFM) said it plans to raise £50m for its WestBridge SME Fund by the middle of next year.
The fund has been extensively pre-marketed and expects a first close of between £15m and £20m – before a targeted final closing of £50m in 2010.
As Wales' only independent fund, it is targeted at SME companies throughout the UK and will be invested from the company's offices in Cardiff and Reading.
However, it is envisaged that at least £15m of the fund will be invested in Welsh companies.
The 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 and has recently recruited two new investment managers, Scott Barham and Bryony Ellison, to help analyse and review these transactions.
WFM invests between £1m and £5m in established, profitable companies and expects to grow its team to approximately eight investment professionals to invest the fund.WFM chief executive Guy Davies said: "Being the only fund of its kind in Wales, we are grateful to have beenwelcomed into the business community in Cardiff, and are looking forward to working with the people we have met and who are
supporting the development of our business."
Chris Nott, senior partner, Capital Law, said: "Wales Fund Managers' SME fund will fill a space in the equity funding market that is both under served in Wales and more widely across the rest of the UK.Its fund will support the development of Welsh businesses and I support their ambition to build a truly UK focused business." I am delighted that the business will be led from Cardiff and Guy and his team are, in my view, a welcome addition to the Welsh business community." Frank Holmes, senior partner, 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.
"I believe their fund structure, by including a large proportion of high-net worth investors, is well suited to support the growth of SMEs. We are looking forward to working with Guy and the team." WFM is chaired by James Wakefield with director Valerie Kendall a fellow partner.