Finance Durham generates £40m and 1,000 jobs in first five years

A fund which has invested more than £10m in County Durham businesses has brought about an additional £30m of spend and created or safeguarded more than a thousand jobs.

These will be the figures reported to Durham County Council’s Cabinet next week, when members receive a report looking back on the first five years of the authority’s Finance Durham Fund.

The purpose of the fund is to make equity and loan investments in county-based businesses to aid business growth and attract businesses to locate to and create jobs in the county.

The meeting on Wednesday 16 November will also look ahead to another five years of Finance Durham, under the continued management of Maven Capital Partners, following its re-procurement.

Cllr James Rowlandson, Cabinet member for resources, investment and assets, said: “We are delighted at what has been achieved through the Finance Durham Fund in its first five years.

“We have invested in excess of £10m in more than 20 businesses across our communities and in sectors and technologies that are at the forefront of change or that add to the county’s capabilities to attract even more investment.

“Indeed, the money we have given out so far has enabled investment of more than £30m in the county and this has in turn supported the creation of more than 200 jobs and safeguarded nearly 800 more.

“It is clear to see the vital role the fund plays in developing our economy, with this recognised by it being named as a key project within our draft Inclusive Economic Strategy, and we are very excited at what the next five years of Finance Durham can bring.”

The meeting will be reminded how the council’s Cabinet approved investment of up to £20 million into Finance Durham in 2016.

Procurement of a fund manager took place in 2016, resulting in the appointment of Maven Capital Partners UK LLP, and Finance Durham became operational in May 2017.

At the end of the first five years of the fund there had been 33 investments made totalling £10.2 million, into 21 companies. Income generated over this time of £768,000 has been re-invested, the meeting will hear.

Cabinet will be given examples of some of the sectors and technologies the fund has invested in. Its investment has helped Power Roll Ltd to develop a low cost, low weight solar film which harnesses the power of the sun.

Don Scott, chief commercial officer at Power Roll, said: “We have appreciated the support we have received from Finance Durham as we scale-up the manufacturing processes for our unique solar film. We have used some of the funding to expand our team here at Jade Business Park and we look forward to working with Finance Durham as we execute our growth plans over the coming years.”

The fund has also supported Hotel Indigo which adds to the high-quality visitor accommodation offer in Durham City; and Growth Capital Ventures which provides expertise in the Fintech and Digital sectors.

Cabinet will hear how the £10.2 million invested has brought in an additional £32.3 million of investment, supporting the creation of 224 jobs and safeguarding of 790 jobs with a Gross Value Added (GVA) impact of £29.7m.

The report sets out how the first five years of the fund were “successful,” and that “it did well to weather the economic shocks of Brexit and Covid.”

Councillors will be told that relationships are “firmly in place” between Maven’s operational staff and staff within the council’s Business Durham service, as well as with businesses and intermediary organisations in the region.

The report tells how the pipeline of enquiries at the end of the first five years is “strong,” and that in the first two quarters of 2022-23 a further £1.29 million has been invested into five companies, with further deals totalling £1.4 million investment into three companies currently under consideration.

Maven has also recently completed the first successful exit from the Finance Durham portfolio, which has made a return of £1 million to the fund, on top of the £900,000 invested. This saw Intelligence Fusion, which provides intelligence data to global security businesses, bought by US owned Sigma 7 group, with the company “well placed” for expansion in County Durham as a result.

Councillors will hear that the reappointment of Maven, with its re-procurement recently completed, brings a “degree of certainty” to the fund for the next phase and an “opportunity to build upon the experience of the first five years.”

The meeting will also be told of an “opportunity” presented by the council’s decision, in line with government policy, to use pension funds to increase local investment. The authority is investing £18m from its pension fund in a new pot that will be managed by Foresight. Councillors will be told that Finance Durham could be used as a “pipeline” for that fund which will be seeking larger investments than Finance Durham can provide.