New community ventue capital funds to aid urban regeneration

20 May 2002

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The Bridges Community Development Venture Funds has been launched with the aim of restoring economic vibrancy to Englandâ€™s most deprived areas. The Â£40m fund will provide capital and apply the principles and experience of venture capitalists to entrepreneurs based in these areas. Sir Ronald Cohen, chairman of Apax Partners and chairman of the fundsâ€™ management company, Bridges Community Ventures, said: â€˜as the economic life of an area deteriorates, its communities become increasingly dependent upon welfare. With these funds we hope to begin a gradual process of reversal by supporting the entrepreneurs that exist in these areas-providing significant capital and expertise to individuals who would not normally be eligible for traditional financing but whose businesses could make a long term contribution to their communityâ€™. It is anticipated that the funds, which held their first closing this month, will be closed at Â£40m, with Â£20m of investment from the private sector and Â£20m in matching funding from the UK Government. Investors in the fund include Sir Ronald Cohen, 3i and Doughty Hanson, HSBC, Lloyds TSB Scotland, Royal Bank of Scotland, Schroder Salomon Smith Barney, Merrill Lynch, Lehman Brothers, the West Midlands Pension Fund, Reuters and several entrepreneurs including Dr Mike Lynch, chief executive of autonomy. SJ Berwin has acted pro bono with John Daghlian and Solomon Wifa acting on its behalf. Tom Singh, founder of the New Look retail chain, has been appointed non-executive director of Bridges Community Ventures. Executive directors are Philip Newborough and Michele Giddens. To qualify for community venture funding, entrepreneurs will have to be located in the most deprived 25% of wards in England and have a strong employment, supplier or market relationship with the area. The suitable businesses, which can be at any stage of development from start-up to MBO and turnaround, will be small and medium-sized enterprises with high growth potential requiring an equity investment of more than Â£100,000.