Coutts and BGF raise more than £80M to invest in scale-up and early stage businesses

Coutts, the private banking arm of NatWest Group, and BGF, the UK and Ireland’s most active growth capital investor, have now raised more than £80 million through the UK Enterprise Fund (UKEF). This provides the bank’s client base with access to investment opportunities in privately-owned scaleup and early-stage businesses, as part of BGF’s nationwide platform.

The fund launched in June last year with £40 million of committed capital and has now been matched by a further £40 million at the close of the second fundraising round. Through BGF, UKEF capital is invested into scale-up businesses headquartered in the UK, providing long-term funding to support growth.

The UKEF aims to provide funding to address equity gaps across the entrepreneurial ecosystem and has been a boost to female-owned businesses with 22 per cent of the first tranche of fundraising backing women-owned businesses. This compares with the industry standard of just one per cent.

UKEF investors can benefit from BGF’s investment strategy of reaching a high volume of high-quality businesses across different growth stages, multiple sectors and all regions of the UK, offsetting concentrated risk exposure.

BGF is the leading growth capital investor in the UK and exclusively takes a minority shareholding in each of the companies it backs. It focuses on supporting investee businesses through its local investment teams based in 15 regional offices in the UK, extensive people network and strategic advice in a variety of areas, such as positive environmental, governance and social changes.

To date, UKEF has exposure in 48 BGF-backed businesses including Character.com, a children’s clothing and branded products ecommerce platform based in Swansea, Enhanc3d Genomics, a human genome mapping business based in Cambridge and Oxford-registered Reactive Technologies, a provider of critical data to the energy grid and asset operators.

One in five of these businesses has a female founder, compared to only one in 100 across the industry, whilst 23 percent have appointed a female Chair from BGF’s network to their Board. 73 percent of the capital invested in this cohort of companies has been deployed into businesses headquartered outside London and the South East.

Andy Gregory, CEO of BGF, said: “By its nature, UKEF is an innovative and highly differentiated offering in equity investing. Through UKEF, Coutts’ clients are able to increase their exposure in privately held UK companies, whilst benefiting from the due diligence, robust governance and skilled investment expertise that comes with the BGF platform.

“Whilst we are acutely aware of the current macro-economic environment for businesses and investors, BGF’s long-term model provides us with the economic means and mindset to view investments and exits from a longer-term horizon, which has proved highly attractive to UKEF investors and indeed to the diverse set of scaleup companies that we continue to back.”

Alison Rose, CEO of NatWest, added: “We are highly encouraged by the continued appetite amongst UKEF investors to support high-potential businesses, and in particular those with diverse founders.

“The Rose Review showed us that £250 billion of new value would be unlocked for the UK economy if women started and scaled their businesses at the same rate as men. Providing better access for funding is key to help realise this potential. That is why funding vehicles like UKEF can have a game-changing impact, especially as current economic conditions are making it harder for high-potential companies to access the resources required to scale. We are now excited to see what a new cohort of dynamic and diverse businesses receiving backing from the next round of UKEF funding can achieve.”