A £400m investment fund to support the growth of small and medium-sized businesses across the Midlands is on course to be launched early next year. The Midlands Engine Investment Fund II (MEIF II) is being delivered by the British Business Bank, bringing the total it has specifically earmarked for investment in the region to over £700m since 2017.
The Midlands Engine Investment Fund II is part of the new Nations and Regions Investment Funds, launched by the British Business Bank, which will deliver a commitment of new funding to drive sustainable economic growth, levelling-up of access to finance in the Midlands through debt and equity funds in the region.
This builds on the success of the existing Midlands Engine Investment Fund which has been in operation since 2017, which has helped smaller businesses overcome challenges during the pandemic, supported regional economic growth and highlighted the region’s reputation for innovation.
Since its inception, MEIF has invested more than £200m into the Midlands, supported the creation of more than 2,370 jobs across 595 Midlands businesses, and unlocked £301m of private sector co-investment. [i]
In 2022, an independent evaluation found that MEIF was responsible for a 73% increase in the headcount of firms supported, 33% of roles created were in research and development and four in every 10 roles were in the top 25% of UK salaries.
Ken Cooper, Managing Director, Venture Solutions, at the British Business Bank, said:
“This £400m commitment to the Midlands Engine Investment Fund II builds on the success of the first Midlands Engine Investment fund, which has already supported nearly 600 innovative and ambitious businesses to access the funding they needed to grow.
“The new fund will further develop the region’s economic prospects through an increase in the supply and diversity of early-stage finance for small businesses, providing finance for firms that might otherwise not receive investment and helping to break down barriers in access to finance.
“The Midlands has a long history of entrepreneurship and by backing entrepreneurs and businesses with growth plans MEIF2 will have a positive impact on the region’s economy. The businesses we back will be creating skilled jobs, fuelling green growth and introducing innovation in products and processes.”
The Midlands Engine Investment Fund II will operate across three tiers: smaller loans (£25k-£100k), debt (£100k-£2m) and equity (up to £5m).
Request for proposals from potential fund managers
The British Business Bank is now inviting proposals from potential fund managers to operate the Midlands Engine Investment Fund II via its website. The new fund is expected to launch in Spring 2024.
The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK government. The Bank is establishing investment funds in areas not currently served by the Bank’s existing regional funding programme before launching follow-on investment funds in existing fund areas.
[i] Figures as at end of April 2022
