Regional venture capital firm Bridges Ventures has launched its sustainable growth fund, Bridges Ventures Fund III, with a first close on equity commitments of £72m, almost equal to the final close of its predecessor.
Fund III continues Bridges Ventures’ focus on the provision of growth capital to SMEs in sectors where underlying social or environmental need creates the opportunity for both commercial returns and positive impacts, the firm said in a statement.
The fund will follow on from the firm’s first two funds, Fund I and Fund II, which were closed in 2002 and 2007 with fund sizes of £40m and £75m respectively, with a primary focus on underserved areas, environment, education and skills and health and wellbeing.
The first close was achieved with the support of investors that have backed previous Bridges Ventures funds and a new investor, the European Investment Fund (EIF), which joins Fund III as the single largest investor to date.
Existing investors following on into this fund include institutions such as Cooperative Insurance, HSBC Bank, West Midlands Pension Fund and South Yorkshire Pensions Authority, private equity backers such as 3i and Doughty Hanson, trusts, endowments and individuals such as Wittington Investments, Merton College, the R&S Cohen Foundation, SHINE – Support and Help in Education, Lesing Nominees, Richard Oldfield, Sir Harry Solomon, and Martyn Webster.
Bridges Ventures is now beginning discussions with several potential further investors and Fund III is expected to grow substantially over the coming twelve months, the firm said.
Philip Newborough, a managing partner at Bridges Ventures, said, “We are proud to launch this third fund with such strong backing from our existing investors and delighted that the EIF has joined the first close as a new investor with Bridges Ventures. To have achieved a successful first close in a difficult fund-raising environment sends a strong signal that, increasingly, investors understand that generating positive environmental and social impact can drive attractive financial returns as well as make a difference.
“In the current economic climate in particular, growth is hard to come by. We believe that our fund provides investors with an attractive and differentiated responsible investment opportunity in the growth SME segment, which despite a combined annual turnover of £1.6tn representing 49 per cent of private sector output, experiences a significant financing gap. Our track record and experience to date demonstrates that by directing capital towards areas where there are strong and pressing social or environmental needs, we are able to find pockets of growth and produce superior financial returns.”
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