UK- Octopus, Aberdeen chosen to manage govt-backed CFE funds

With a total size of £75m, the CFE fund is a measure introduced by the government to bridge the funding gap that many UK small and medium-sized businesses are experiencing as a result of the economic downturn.

Octopus will focus its investments on businesses based in the Southern part of the UK, while Aberdeen will look to companies from the North. The funds, which have no sectoral bias, will invest between £200,000 and £2m in businesses with strong management teams, existing cash flows and growth potential. Investments will consist of a combination of ordinary shares and loan notes with an anticipated term of up to five years.

Besides being headquartered in the UK, investee companies must meet the EU definition of an SME with fewer than 250 staff and a turnover of no more than EUR 50m.

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