Top equity providers over the years

European heavyweight 3i can trace its roots to 1945 when it was armed with £15m to back growing businesses as the Industrial and Commercial Finance Corporation, an initiative backed by the Bank of England and other major banks to support war-ravaged Britain. In 1987, the banks sold their stakes and 3i was born, going on to become the most prolific investor in UK businesses.

In the noughties, it made a concerted effort to steer away from venture and focus on fewer, larger deals. LDC has since moved up the rankings, completing 14 deals in the first 11 months of 2009 (including a fund investment in China) and another two in December, bringing the total to 16 at the time of going to press.

Now the government is again looking to create a bank-funded vehicle to support SMEs, namely the £500m Growth Capital Fund. It follows a review by former 3i managing director Chris Rowlands, who found a "permanent gap" existed for as many as 5,000 businesses in Britain.

Who better to manage it? If not LDC itself, it may be another part of the bank, which is not only active from a private equity and leverage point-of-view, but is part government-owned.

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