The north-east oil and gas industry is being targeted by a £2.5billion fund to help fast-growing small and medium businesses.
A Business Growth Fund (BGF) office is being set up in Aberdeen and the man responsible for it, Simon Munro, said last night the Granite City was the ideal location for the expansion.
He added: “Like every other industry oil and gas went through a very tough time in 2009 and 2010 but, despite the current economic climate, businesses servicing it seem to have turned the corner and are now performing well. With the additional confidence that this brings we need these companies to be asking what opportunities are available to them and how do they access these?
“Our challenge to the owners and managers of these firms is to tell us what they could do today with new capital and our support.”
BGF is an independent company backed by five of the UK’s main banking groups: Barclays, HSBC, Lloyds, Royal Bank of Scotland and Standard Chartered. It is targeting fast-growing, private companies with a turnover of between £5million and £100million.
The fund will invest between £2million and £10million per business in return for a minority stake – at least 10% – and a seat on the board for a BGF director. It aims to provide long-term equity investment for growing companies which do not have access to new capital.
The Aberdeen office will be the sixth in the UK and only the second in Scotland after Edinburgh.
Mr Munro is searching for a suitable location in the Granite City and plans to recruit three “market-facing investment executives” with relevant oil and gas experience to service the north-east market. He recently became the fund’s regional director for Scotland, bringing 20 years’ experience advising and investing in companies – predominantly in the oil and gas industry.
Mr Munro’s wife, Clare, is head of the oil and gas team at law firm Brodies in Aberdeen.
Earlier this year, BGF appointed Audrey Baxter – chief executive at Fochabers-based Baxter’s Food Group – as a non-executive director.
Announcing its plans for Aberdeen, BGF said: “We will look to invest across a range of sectors but will particularly focus on the vibrant oil and gas industry.”
Mr Munro added: “Taking a business to the next stage can be daunting. Accepting outside investors who are not sleeping partners but who will add expertise and experience to your business has to become one of the defining characteristics in achieving growth.”
Andy Willox, the Federation of Small Businesses’ Scottish policy convener, said: “The Business Growth Fund is a very specific product for a certain type of business with growth projections.
“I am sure businesses in Aberdeen and the rest of the north-east with these ambitions will be delighted that they have chosen to locate an office here, however, this fund can only play a part of a wider solution to the business finance problem.
“We look forward to the chancellor’s autumn statement next week, when we hope to hear that his credit-easing proposals will make a real difference for smaller businesses across Scotland.”
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