28 October 2020: Alternative fund manager Frontier Development Capital (FDC) has announced the first close of its latest fund, the FDC Debt Fund (FDC Debt LP). The £100 million debt fund achieved a first close of £75m and will be announcing its first deals within the coming weeks.
The FDC Debt Fund supports small and medium sized businesses based in the UK that need flexibility in their funding structure, particularly in these uncertain times. The fund can provide loans of up to £7.5 million to support trading businesses and property developers throughout the UK.
FDC, headquartered in Birmingham, is a regional fund manager that has been lending directly to SMEs nationwide since 2016. Recent FDC deals include providing a £3 million loan as part of the funding for the buy-out of Hammonds Furniture based in the East Midlands, and £5 million invested in Armighorn Group, a national care home group headquartered in Birmingham, to support its acquisition strategy.
The Fund has been made possible due to commitments from West Midlands Pension Fund (WMPF) and British Business Investments, £75 million in aggregate. Both aim to support the growth of UK SMEs by mobilising private capital to increase the availability and flexibility of finance.
Jill Davys, Assistant Director, Investments, West Midlands Pension Fund, said:
“West Midlands Pension Fund is delighted to be supporting FDC in providing funding to regional SMEs at this critical time for the economy, whilst also delivering on the broader aspiration of the Fund to support local businesses and the local economy, delivering dual benefit of providing a competitive return to support meeting the Fund’s investment return.
“This latest investment with FDC follows on from previous investments made by the Fund which have helped not only deliver the financial returns the Fund needs to pay pensions but also supported growth in the local regional economy.”
Judith Hartley, CEO, British Business Investments, said:
“British Business Investments aims to increase the supply and choice of finance to smaller businesses across the UK, and we achieve this by supporting regional fund managers, like FDC, on their growth journey. This allows FDC to raise more substantial funds and support more SMEs, particularly those based in the regions.”
Sue Summers, CEO of FDC, said:
“We are grateful to both existing and new investors for their support. Raising a Fund such as this in these difficult times is testament to our incredible team and a business model that supports regional SMEs, the engine room of the UK economy.
“For almost four years, we have worked closely with investee businesses spanning a broad spectrum of industries and business strategies. The creation of the FDC Debt Fund is the next step for FDC as a supportive, intuitive fund manager that understands real businesses. That’s why we already have deals in the pipeline that are completing imminently despite the uncertainties in the UK economy.”
The legal name of the new fund is the FDC Debt LP.
FDC provides flexible funding packages, based mainly on debt, to match the needs of SMEs in the regions. Growth capital funding is available nationwide, up to the value of £7.5million. FDC is keen to support ambitious management teams, and can invest in any sector, for any business funding requirement. FDC is a Responsible Investor and seeks to promote responsible business standards in the businesses in which it invests.
For more information please visit https://www.frontierdevelopmentcapital.com/ or call 0345 319 4528.
About West Midlands Pension Fund
The West Midlands Pension Fund provides pension services to over 330,000 current and former employees of the seven metropolitan district councils, combined authority and over 700 public body employers within the West Midlands. It is one of the largest funds in England and Wales, employing 161 FTE members of staff and as at March 31, 2020 the Fund was valued at £15.3 billion. The West Midlands Pension Fund strives to be a best practice organisation, delivering a customer-focused service, while providing value for money to its stakeholders.
About British Business Investments
British Business Investments is the trading name of British Business Investments Ltd, a wholly-owned commercial subsidiary of British Business Bank plc, the UK government’s economic development bank. It forms part of the British Business Bank’s commercial arm. British Business Investments aims to earn a commercial return by investing – through finance providers – in smaller businesses and small mid-caps, pursuing investments on a fully commercial basis without receiving any economic advantage from the government. Find out more at bbinv.co.uk.
British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. Neither British Business Bank nor its principal operating subsidiaries are authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.
The funding from British Business Investments to Frontier Development Capital’s FDC Debt Fund does not amount to any endorsement or warranty from British Business Investments, the British Business Bank plc, or the government of the UK.Back