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Scottish-European Growth Co-Investment Programme

What is it?

The Scottish-European Growth Co-Investment Programme was launched in June 2017. It is a £100 Million equity co-investment scheme managed by EIF.  It is match funded by existing Investment Funds who have been supported by EIF, the objective being to create an overall Fund of up to £200 Million. It is a joint initiative by EIF and Scottish Enterprise, who have each contributed £50 million.  It aims to support businesses looking to raise £2 million or more in equity finance for growth.

Who can apply?

The Scottish European Growth Co-Investment Programme is suitable for businesses in all areas of Scotland looking for equity investment to meet their growth ambitions.

Commercially viable businesses that have an established operating base in Scotland are eligible to apply for this fund.

To be eligible your company must secure an investment commitment from a European Investment Fund accredited fund manager.

Your company must also:

  • Be a commercially viable business, aiming to grow and with international ambition;
  • Have an established operating base in Scotland;
  • Meet the European Union definition of a SME - This means having fewer than 250 employees, an annual turnover of no more than €50 million, and/or annual balance sheet Net Asset Value below €43 million.

The fund managers will confirm your eligibility as part of your company appraisal.

Who can’t apply?

The investment cannot be used to directly fund activity in the following sectors:

  • Real estate/property development
  • Banking and insurance
  • Gambling
  • Bookmakers
  • Tobacco
  • Adult entertainment
  • Sub-prime financing
  • Religious or political movement
  • Movements, which have an adverse impact on animal or human rights.

How it works?

Companies looking to secure investment or explore the option, should in the first instance approach the Scottish Investment Bank - https://www.scottish-enterprise.com/about-us/what-we-do/investment/sibfor advice and support about applying for finance.

SIB can then establish if equity investment is an appropriate source of finance for your company. This will include working with the SIB to identify appropriate fund manager(s) for you to approach. Note that Investment Managers (and their proposed co-investment vehicle) will have to be approved before any investment can proceed.

Scottish Enterprise will also help you prepare your investment proposition and 'pitch'.

The fund manager will carry out due diligence and assess your investment proposition. Neither Scottish Enterprise nor the European Investment Fund will not be involved in any aspect of the assessment process.

Should the investment proposal meet the criteria EIF will conduct an initial screening to determine eligibility before proceeding.

All funding will be on fully commercial terms. The fund manager will make all decisions on funding and will be responsible for managing the whole investment amount, including SIB’s and the European Investment Fund's commitment.

The co-investment capital will be provided through a co-investment vehicle, which is to be set up and managed by the fund manager. The fund manager will invest in the target company from the co-investment vehicle alongside an investment from the main investment fund. The size of investment will be assessed in each case. There are no pre-defined maximum or minimum amounts.

EIF will manage and deploy the Scottish-European Growth Co-Investment Programme through co-investments into companies alongside investment funds in EIF's portfolio. Scottish Enterprise is available to provide support to companies in identifying appropriate fund managers to approach, and in preparing their investment propositions.       

Sandy Blog

Through this programme, SIB can invest a maximum of £5 Million into any one company. However, it cannot invest more than the European Investment Fund or more than 50% of the fund manager's investment.

Who are the Fund Managers?

A copy of the EIF announcement is attached together with a list of existing Investment Managers. Any other Investment Managers who are interested in participating should have an established relationship with EIF, a positive track record and submit a co-investment proposal to SIB as soon as possible.

Conclusion

We welcome this new initiative which is an important new source of capital for high potential Scottish companies.

 

Sandy Finlayson

Founder

sandy.finlayson@mbmcommercial.co.uk

Tel: 0131 226 8200

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