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04 May 2012

Fund manager round up - Quarter 1 2012

A review of some of our notable investments from January, February and March...

Fund Managers

The first quarter of 2012 was notable for a surge of activity by The North West Fund's six sub-funds. Between them, our fund managers invested £9.6million in 30 businesses in January, February and March, as well as supporting 11 of our portfolio companies with follow-on funding.

Here, each fund manager picks a first-quarter investment that they found particularly memorable or inspiring...

Richard Young head shotRichard Young, fund manager at EV, managers of The North West Fund for Venture Capital

Michelin man 'breaks-out' to set up on his own

In a hectic quarter for The North West Fund for Venture Capital, a year-old business that fits new car tyres on the drive of the customer was an especially memorable investment for fund manager Richard Young of EV.

Tyres on the Drive, based in Holmes Chapel, Cheshire, attracted £340,000 to help it expand its services beyond Wirral, Cheshire and Greater Manchester into the rest of the North West.

For Richard, however, a key selling point for the company was the background of founder and managing director Dominic Clark. Dominic, a former senior manager with Michelin, used his experience and contacts in the tyre sector in setting up Tyres on the Drive.

Richard said: "One of the main things that attracted us to that deal was Dominic. He has spent all his career in the industry and he has used that knowledge and experience to start up his own business.

"We think that the business premise - a service which fits tyres at home - is a great idea, one that will appeal to many. But first and foremost the deal was about the quality of the individual."

Tyres on the Drive fulfils the criteria of 'management break-out', which Richard has been keen to promote while heading up The North West Fund for Venture Capital. It means experienced managers use their know-how and contacts to 'break-out' of a company and set up their own.

Dominic said: "After many years in the tyre industry, I realised that we could offer customers an alternative to waiting around in a cold and drafty tyre shop. This new model puts the customer first, capitalises on the potential offered by e-commerce and, since there is no need for us to have a presence in every town, it allows us to be more efficient as a business."

Simon Cleaver head shotSimon Cleaver, investment director at YFM Equity Partners, managers of The North West Fund for Development Capital

Healthcare firm recruits funding for growth

A specialist healthcare recruitment company that works with organisations such as the NHS and HM Prisons provided a highlight for Simon Cleaver and the team at YFM Equity Partners, managers of The North West Fund for Development Capital. St Helens-based Castlerock Recruitment Group provides GP locums, nurses and community workers and operates 11 offices across the UK.

The injection of funding from The North West Fund for Development Capital will be used to invest in Castlerock's infrastructure and to strengthen its management team.

Ian Parsons, an experienced healthcare executive, has also joined the board as a non-executive director to help the Castlerock management team to continue growing the business successfully and profitably. Parsons was formerly CEO of Macarthy plc, a FTSE 250 listed company, and has a wealth of healthcare and senior management experience in private-equity backed businesses. He is currently Chairman of City Health Care Partnership CIC, a community health partnership, and RMS Group, a logistics and shipping company.

Joseph Bergin, Head of North West Investment for YFM Equity Partners, who led the investment said: "The management team at Castlerock have delivered strong growth in their business over the past couple of years by winning new customers and expanding into new segments of the healthcare market. We were particularly impressed by the high regard with which they are viewed by their customers."

Castlerock chief executive Ian Munro said: "This cash injection will enable us to grow our business, take on new staff and offer a larger number of specialist healthcare professionals to hospitals, clinics, care homes and other institutions that rely on experienced healthcare professionals to deliver the best-quality healthcare every day."

Gary Guest 100sqGary Guest, fund manager at FW Capital, managers of The North West Fund for Business Loans

Partnership banks the right funding package for SG World

A loan package led by Lloyds TSB Commercial for a Crewe-based business solutions company highlighted how The North West Fund for Business Loans works closely with banks to support companies. SG World secured a £250,000 loan from The North West Fund for Business Loans to complete a £5million loan and working capital package.

The package allowed SG World, which provides visitor management, health and safety and contractor management solutions, to buy back its premises, having previously sold them to fund earlier growth plans. It also plans to expand its global client base.

For Gary Guest of FW Capital, the fund manager of The North West Fund for Business Loans, the deal exemplified the importance of working closely with banks to support North West businesses.

Gary said: "Our £250,000 loan turned out to be an important final part of this lending package for this prominent North West business. Working with Lloyds TSB Commercial to complete the loan quickly is another example of how we are working with banks and other funders to make sure our loans are making a difference to a range of growing businesses in the North West of England." 

Mark Haase, director of SG World, said: "The mix of short and long-term lending perfectly suited our needs and the support and guidance from our relationship manager in bringing together the other lending partners was key to securing the successful completion of the deal."

Penny A head shotDr. Penny Attridge, investment director at SPARK Impact, managers of The North West Fund for Biomedical

Pioneering healthcare in the heart of the North West

An inspiring pathfinder investment from The North West Fund for Biomedical is helping to develop a device that enables the rapid diagnosis of a common heart condition which has potentially life-threatening consequences.

SPARK, which manages the fund, has invested £50,000 into Rapid Rhythm, based at Manchester's MedTECH Centre, to develop the hand-held instrument. Rapid Rhythm uses Electro Cardio Graph data to detect Atrial Fibrillation (AF), the most common cardiac arrhythmia, which carries a high-risk factor for stroke. If AF is detected the stroke risk can be reduced substantially using anti-coagulants drugs.

Rapid Rhythm's hand-held device offers advantages in diagnosing AF, particularly among large numbers of patients as it is so quick - and it was all pioneered in the North West.

Penny Attridge, of SPARK and fund manager for The North West Fund for Biomedical, said: "The investment we made will allow Rapid Rhythm to optimise the design of the device. Further investment will then be needed to fund the production of prototypes, run clinical trials and gain regulatory approval, which would be a major step.

"The great thing about this product is that it could genuinely change the future of heart healthcare. We have seen several high-profile stories recently that demonstrate the importance of early diagnosis of heart problems. All this great work is going on in the North West, so this is an investment that we are really excited to make."

David Smith head shotDavid Smith, investment director at AXM Venture Capital, managers of The North West Fund for Digital & Creative

Dynamic duo bring publishing to life

A business started by a duo entering the tough world of publishing provided one of The North West Fund for Digital & Creative's investments of the quarter.

The fund, managed by AXM Venture Capital, provided first-round investment for Liverpool-based Survival Media.

The funding will be used to publish the Student Survival Guide and Student Property Guide, expand media services and roll out the brand to other university cities.

Survival Media is led by management team Mike Clarke and Jonathan Saunders. Mike has 20 years' experience of editing and publishing magazines in Liverpool, while Jonathan Saunders, who is from Manchester and just 18, is one of the region's youngest entrepreneurs.

David Smith, of AXM said: "The pair have the benefit of passion and eagerness that seasoned entrepreneurs can lose after years of developing a business. But they still have the experience and knowledge in the industry that is needed to grow a successful enterprise.

"Watching Mike and Jonathan bounce ideas off each other and then plan how to make them happen was inspirational. They strike the right balance of endless ambition while still having the know-how to get it all done."

Mike Clarke added: "At Survival Media we are all about combining old with new. It is what the publishing industry needs to survive. We are using new technologies to enhance print media to create new forms of advertising. Our techniques include augmented reality, apps and video."

Adam Workman head shotAdam Workman, partner at CT Investment Partners, managers of The North West Fund for Energy & Environmental

Fund lures energy business across Irish Sea

The North West Fund for Energy & Environmental invested in a leading bioenergy provider as the company changed its base to the region, from Ireland.

CT Investment Partners (CTIP), which manages the fund, completed the investment in Imperative Energy, a supplier of bioenergy solutions to industrial, commercial and public sector clients in the UK and Ireland.

The investment saw Imperative move its head office from Ireland to Sandbach, Cheshire, allowing it to expand its sales and technical team as it aims to take on more clients.

CTIP partner Adam Workman, fund manager of The North West Fund for Energy & Environmental, said: "The biomass sector is in growth now, so this opportunity really made sense to us. We are confident that Imperative's future will be a bright one.

"We found the management team really engaging and impressive. It was clear that their hard work and dedication had grown Imperative into a quality energy company. It is now well-placed to capitalise on the growing market for alternative energy solutions."

The company is an exclusive supplier of Schmid biomass boilers, one of the world's leading wood energy equipment manufacturers.

Joe O'Carroll, managing director at Imperative Energy, said: "Having such knowledgeable investors on board is key to growing a renewable energy business in such a competitive environment. CTIP's sector experience and broad network of contacts will be a key differentiator to the future of our company."

 

If you are interested in finding out more about equity/loan funding to help grow your business please visit: http://www.thenorthwestfund.co.uk/funds


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