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British Business Bank boosts European Capital UK SME fund to £100m to help provide debt finance to UK’s smaller businesses

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Total commitments under the British Business Bank Investment Programme now close to £200m, expected to facilitate up to £1 billion of total new lending

The government-backed British Business Bank, set up with the aim of making finance markets for smaller businesses work better, has today announced that it is committing £50 million to European Capital UK SME Debt LP, a fund providing debt finance to small and medium sized enterprises (“SMEs”) in the UK, which will invest in businesses with a turnover of up to £100 million.

The British Business Bank’s £50 million is to be matched by European Capital Limited and its affiliates, taking the total available in the fund to £100 million.

The British Business Bank was set up to make finance markets for smaller businesses work better, enabling the sector to prosper, grow and build economic activity.
The investment means that the total funds committed by the British Business Bank Investment Programme now stands at £198million, which is expected to leverage up to £1 billion of new lending for the UK’s SMEs.

European Capital Limited is an investment company for pan-European private equity, mezzanine, unirate and senior debt investments, which has invested over €3.6 billion in over 100 portfolio companies, in a diverse range of industry sectors, since inception.
Keith Morgan, CEO, British Business Bank, said:

“We are very pleased to be making this investment, which will deliver substantial additional funding to a much-needed area of SME financing. This is a significant investment, enabling an experienced US non-bank lender to establish a dedicated UK smaller company lending fund, bringing greater choice to the business finance market.”

JC Morales Cortes, Director of European Capital Debt Management Limited (an indirect wholly-owned affiliate of American Capital, Ltd. (Nasdaq: ACAS)), the investment manager of European Capital UK SME Debt LP said:

“We are delighted to be partnering with the British Business Bank in our new fund, European Capital UK SME Debt LP. We look forward to providing finance and supporting UK small and medium sized businesses through this fund.”

The news comes following the Chancellor’s recent announcement of a further £100 million for the British Business Bank’s Investment Programme. The commitment, made at the launch of Innovate Finance, a new trade body promoting and supporting the UK’s FinTech scene, takes the total available for its investments in new and alternative finance providers to £400 million.

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Notes to editors:

For more information, please contact:

Department for Business, Innovation and Skills:
Jason Raj
Tel: 020 7215 5978
Email: jason.raj@bis.gsi.gov.uk

European Capital Debt Management Limited
JC Morales Cortes, Director
Nathalie Faure Beaulieu, Director
Ira Wagner, Director
Tel: 0207 539 7000

 

About British Business Bank and the Investment Programme

The British Business Bank is supporting economic growth by bringing together public and private sector funds to create more effective and efficient finance markets for smaller and medium-sized UK businesses. It is a key element of the Government’s Industrial Strategy, and it is already contributing to making the UK the best place in Europe to start, grow and finance a business.

The British Business Bank programme is currently run directly by the Department for Business, Innovation and Skills and is not authorised or regulated by the Financial Conduct Authority or the Prudential Regulation Authority. British Business Bank plc will operate as a Government-owned financial institution once HM Government has received European Commission State aid clearance, which is expected in late 2014.

Launched in April 2013, the British Business Bank’s Investment Programme now has a total of £400m to invest, having been allocated an additional £100m on 6 August 2014. The programme is designed to promote diversity of lending supply through supporting a variety of potential finance providers. It has the flexibility to make a broad range of debt and equity investments, including in:

  • challenger banks
  • debt funds
  • supply chain finance and invoice discounting
  • asset-backed lenders and leasing
  • peer-to-peer lenders and other platforms.

The British Business Bank recently published a Strategic Plan, which describes how the British Business Bank is set up, how it operates and its main areas of activity. The plan also reports on recent progress and developments as well as setting out key financial, risk and other considerations. Recent performance highlights include:

  • £782m of total lending and investment supported in financial year 2013
  • 61% of the £782m total was supported through new, emerging or smaller finance providers
  • Over 30,000 businesses were benefiting from finance through British Business Bank programmes as at 31 March 2014
  • £1.56bn of total lending in the market to support UK Businesses provided by British Business Bank programmes as at 31 March 2014.

About European Capital Debt Management
European Capital Debt Management Limited is a UK investment manager authorised and regulated by the Financial Conduct Authority and is approved as an Alternate Investment Fund Manager (“AIFM”) under the Alternate Investment Fund Managers Directive (“AIFMD”). It is an indirect wholly-owned affiliate of American Capital, Ltd. (“American Capital”).

About European Capital
European Capital Limited is an investment company for pan-European private equity, mezzanine, unirate and senior debt investments and has invested over €3.6 billion in over 100 portfolio companies, in a diverse range of industry sectors, since inception. European Capital currently has €0.9 billion in assets under management. European Capital is a wholly-owned affiliate of American Capital. It is managed by European Capital Asset Management Limited (“ECAM”), an indirect wholly-owned affiliate of American Capital. ECAM and its affiliate European Capital Financial Services Ltd. (“ECFS”) have offices in London and Paris. As of 30 June 2014, ECFS had 24 investment professionals and employed 31 support staff. European Capital and its affiliate, American Capital, will consider private equity transactions in euros or sterling of up to 400 million for One Stop Buyouts® and 10 million to 100 million for senior, mezzanine and unitranche debt investment opportunities. For further information, please refer to www.EuropeanCapital.com.

About American Capital
American Capital, Ltd. (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products. American Capital manages $19 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $83 billion of total assets under management (including levered assets). Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC), American Capital Mortgage Investment Corp. (Nasdaq: MTGE) and American Capital Senior Floating, Ltd. (Nasdaq: ACSF) with approximately $11 billion of aggregate net book value. From its eight offices in the U.S. and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million. For further information, please refer to www.AmericanCapital.com.