British Business Bank Commits £60 Million to NorthEdge Investment Fund
The British Business Bank has announced a significant £60 million commitment to private equity firm NorthEdge's Fund IV. This investment is part of the bank's new Growth Equity strategy, designed to support smaller businesses aligned with the UK's Industrial Strategy. The fund will focus on backing founder-led SMEs and businesses across the nations and regions of the United Kingdom.
Focus on Regional Growth and Key Sectors
Manchester-based NorthEdge specializes in the lower mid-market and has invested over £780 million into 49 companies through four regionally-focused funds. In 2024, its portfolio contributed £656 million in Gross Value Added to the UK economy and supported nearly 10,000 jobs. Notably, approximately 70% of this economic impact was generated outside London and the South East.
Fund IV will target the technology, healthcare, and business services sectors, making investments ranging from £8 million to £50 million. These investments will be for controlling or significant minority equity stakes, aimed at helping portfolio businesses scale. The fund may also utilize co-investments for larger deals and follow-on investments, with the British Business Bank participating in these opportunities.
Government and Bank Leadership Support
Chancellor Rachel Reeves has expressed strong support for this initiative, emphasizing its role in boosting growth. She stated, "We are pulling every lever to boost growth – making record investment in our infrastructure and public services, unlocking opportunities for companies through major trade deals, and supporting innovative businesses to start, scale and stay in Britain through our modern Industrial Strategy."
Reeves added, "This major commitment from the British Business Bank to NorthEdge will drive even more growth – unlocking millions of pounds of investment for smaller UK businesses to expand, create new jobs, and keep our country at the cutting edge of frontier tech, life sciences and business services."
Adam Kelly, managing director and co-head of funds at the British Business Bank, highlighted the strategy's focus on regional scaling. He said, "Scaling up smaller businesses in the UK's Nations and regions is key to achieving the government's growth mission. Under this new Growth Equity strategy, we can back more innovative businesses and crowd in further private capital."
Partnership and Future Impact
Lucie Mills, partner at NorthEdge, welcomed the British Business Bank's support as a cornerstone investor. She noted, "Our investment strategy has always been focussed on building businesses of national and international importance from the UK regions, so it is fantastic to have a leading UK institution backing a UK-focussed fund – reinforcing our shared commitment to driving growth across the nations and regions of the UK."
This partnership aims to deliver meaningful regional and economic impact by providing the necessary finance for businesses to scale and remain in the UK, fostering innovation and job creation across diverse sectors.
