SIB reverts to two funds as it prepares £75m investment drive

The Scottish Investment Bank (SIB), the investment arm of Scottish Enterprise, is streamlining its financial offering to pave the way for an increase in the flow of capital into high-growth Scottish businesses.

The move involves cutting the number of its funds from four to two, and will widen the investment parameters of each.

It comes as the organisation prepares to pump a further £75 million into companies across Scotland during the next three years.

Since its launch in 2003, SIB has invested £188m in more than 340 firms.

The re-launched Scottish Co-investment Fund (SCF) and Scottish Venture Fund (SVF) aim to increase flexibility and accessibility for both businesses and investors.

By streamlining its co-investment funds from four to two and widening the investment parameters, SIB says it is increasing flexibility and accessibility for businesses and investors who will now be able to easily identify and seek to access the appropriate investment fund where there is a funding gap and request for SIB investment.

Kerry Sharp, the head of SIB, said the changes have been based on feedback from the market, adding: “That’s why we’ve widened the investment parameters and simplified the criteria to benefit both the private sector investors we work with and the companies we invest in. This greater flexibility to invest across a broader range of businesses will enable us to support more companies to reach their full potential, which in turn helps the Scottish economy to grow.”

Both funds are widening their deal parameters, with investment starting from £10,000 up to £1.5 million through the SCF and up to £2 million through the SVF in deal sizes up to £10 million.

Co-investors through the SVF will no longer be required to sign a partnering agreement with Scottish Enterprise, which should make the fund more accessible to new investors in the UK and internationally. Investors through SCF will continue to be vetted by SIB, and must adhere to the terms of the partnership agreement.

UK government data shows equity investments in small firms grew from £1 billion in 2010 to £1.6bn in 2013 amid strong seed funding activity. In Scotland, investment rose from £116m in 2012 to £244m in 2014.