Prime Highlights-
- British Business Bank commits £50m as cornerstone investor in Soho Square fund.
- Fund II targets UK businesses with EBITDA up to £15m and turnover up to £200m.
Key Facts-
- At least 75 percent of Fund II will invest in UK businesses outside London.
- British Business Bank supports £23bn in finance for nearly 64000 UK businesses.
Background-
Fifty million pounds now flows into Soho Square Partnership Capital Fund II, courtesy of a fresh commitment from the British Business Bank, which steps in as the fund’s cornerstone investor.
The money is set aside to help established small and medium sized businesses raise capital for expansion, acquisitions and succession planning. Several US institutional investors have signed on as well, growing the fund’s overall capital pool. Soho Square Capital, headquartered in London, works with lower mid market businesses, providing structured finance to founder owned companies based across the UK.
The firm’s model centers on debt led funding paired with smaller or minority equity positions, giving founders an alternative to traditional bank lending and full private equity buyouts.
Fund II will back businesses across sectors identified in the government’s industrial strategy, favoring digital and technology alongside professional and business services.
The fund will lend to companies with earnings before interest, tax, depreciation and amortization of up to 15 million pounds and turnover reaching up to 200 million pounds. At least 75 percent of the fund is expected to flow into UK businesses, with particular focus on companies located outside London.
Adam Kelly, Managing Director and Co-Head of Funds at the British Business Bank, said the commitment addresses a gap in the debt market, unlocking flexible capital for established businesses with strong growth potential. He said the investment will help create jobs and drive long term economic growth across the UK’s regions.
Blair McDougall, Minister for Small Business and Economic Transformation, said the government’s Modern Industrial Strategy ensures high growth businesses have the capital needed to succeed in the UK, helping them scale and raise living standards nationwide.
Walid Fakhry, Co-Managing Partner at Soho Square Capital, said the bank’s backing allows the firm to give founder owned businesses institutional capital on terms that let them retain control while continuing to grow.
The British Business Bank’s core programmes currently support 23 billion pounds in finance for nearly 64000 smaller UK businesses.