Invest NI Access to Finance

February 2013

Growth Loan Fund (£50m)(DEBT/MEZZ)

Development Fund I (£30m) (EQUITY)Small

BusinessLoan Fund

(£5m) (DEBT)Co-Fund NI (£16m)

(EQUITY) Development Fund II (£30m) (EQUITY)

NISPO Funds(£12m)(EQUITY)

Deal size Up to £250k £500k £2m

Provides Risk Capital funding continuum - from start-up to development capital up to £2m: ‘Enterprise Escalator’ - £12m NISPO funds (EQUITY) for seed and early stage LIVE £16m Co-investment fund (EQUITY) – based on Scottish model LIVE £50m Growth Loan fund (DEBT/MEZZ) initiative LIVE £5m Small Business Loan Fund initiative (DEBT) LIVE £60m (2 Funds of £30m) Development Funds (EQUITY) – up to £2m deal size – recognised equity gap

in UK – OUT TO TENDER

Invest NI’s Access to Finance Strategy

Funds and Fund Managers

NISPO Funds

NISPO Funds – offering an ENTERPRISE ESCALATOR and managed by E-Synergy

• £10 million Invest NI investment

- £5 million equity – Invest Growth Fund – early stage, £50k to £250k, 5 years investment period – private sector contributes 30% in any funding round

- £2 million equity - £1 million each for QUB and UU – seed, up to £200k investment over a 4 years investment period

- £3 million Proof of Concept grants, non university sector and complements university Proof of Concept scheme

• Investment Readiness and Showcasing events

• Currently seek an extension to Invest Growth Fund and Proof of Concept

Co-Fund NI

• To meet the gap in VC funding continuum between NISPO and Crescent II –funded by Invest NI; based on the Scottish Enterprise model.

• Aims to co-invest alongside business angels and other private investors – encourage Halo development and accelerate development of syndication. Angels / private investors lead the deal and set the terms; must demonstrate a identifiable funding gap of no more than 45%.

• Co-investment not exclusive to business angels but the primary target

• Average deal size between £250,000 and £450,000, although scope to go higher

• £7.2 million for investment from Invest NI, over 6 years, average 8 deals per annum, average deal co-investment £150k alongside c£200k of private investment.

• Clarendon Fund Managers have the contract – for services, not fund management. 12 deals completed to date and pipeline healthy.

Growth Loan Fund • Minimum loan size of £50k with an estimated 50-60 loans per annum; typically

unsecured loans - interest rates typically 8.5% to 12% with an additional profit share

• Target loan size of £50k-£500k to support SMEs with growth potential

• Proposed as a 10 year project with lending over the first five years and realisation over next five years to complete collection

• £50m funding is in place - £25m from Invest NI and £25m from the private sector.

• Whiterock Capital Partners - a consortium led by Braveheart Investment Group are managing this Fund.

• Operational from June 2012. The first loans have been made and the pipeline is healthy.

Small Business Loan Fund

• Aim to provide loans of between £1,000 and £50,000 on a typically unsecured basis, at 8%-16% interest rates

• At the bottom end (up to c£25k) this is largely a social initiative – will include start-ups and social enterprises

• Some economic impacts anticipated above c£25k

• Ulster Community Investment Plc (“UCI”) has been appointed to manage this fund

• Launched Feb 2013

Development Funds

• Fund model approach – limited partnership with 10 year term – 5 year investment period. Aiming to do deals in 20 companies.

• Completes the dealflow chain given the equity gap in venture capital.

• Deal size £450k to £2million.

• Two funds of c. £30m each.

• Fund Managers will be required to raise private capital alongside the proposed £15m commitment being made by Invest NI.

• Tender for fund management now issued – closing date mid March 2013.

Summary

• Provides an overarching strategy for Venture Capital and Loan Funds

• Provides a continuum of funding (£1k-£2m) for early stage and growth companies

Further details of funds available at: http://www.boostingbusinessni.com/jobs/access-to-finance/

Contact Details for Invest NI Corporate Finance team:

William McCulla (Director, Corporate Finance) – 02890 698697Helen Kirkpatrick – 02890 698674Allen Martin – 02890 698691Sinead Magee – 02890 698678Gillian McKenna – 02890 698677