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New round of Enterprise Capital Funds boosts investment in high growth businesses

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2007/102) issued by The Government News Network on 13 November 2007

Three new groups are to be awarded £60 million as part of the Government's efforts to tackle the lack of financial backing available to fledgling businesses.

The public funding will be combined with £30 million of private sector money as part of the latest round of Enterprise Capital Funds - designed to invest in small high growth companies.

Speaking at the launch of Enterprise Week, Secretary of State for Business, Enterprise and Regulatory Reform John Hutton said:

"Almost 80 per cent of small businesses seeking finance obtain it on their first attempt, but a small number still face difficulties, particularly companies seeking investment to grow. We're working to address these market failures.

"Enterprise Capital Funds help SMEs with high growth potential to raise equity finance up to £2 million.

"This brings the total Government commitment to this programme to more than £141 million since last year."

The three groups to receive Enterprise Capital Funds are:

* MMC Ventures Limited - a £30 million fund which will be invested across the UK targeting businesses in the healthcare, technology and financial services sectors.

* The Dawn Capital Fund - a £30 million fund which will invest in traditional sectors where there is scope to make improvements through the use of technology.

* Oxford Technology ECF - a £30 million fund operated by an established fund management team which will operate out of Oxford targeting early stage companies in the science, engineering and technology sectors.

David Quysner, Chair of the Capital for Enterprise Board that advised the Government during the assessment stage said:

"These new funds will be positive additions to the ECF portfolio. They demonstrate that the model is attractive to good quality fund managers and, just as importantly, to the private investors willing to back them.

"These funds will target the equity gap, making investments in small, innovative companies that can produce good returns but which would otherwise struggle to get funded."

Mr Hutton also announced the creation of Capital for Enterprise Limited, which will manage the funds from 1 April 2008.

The new body will take charge of a number of current government programmes including the UK High Technology Fund, the Regional Venture Capital Funds, Early Growth Funds and the Small Firms Loan Guarantee Scheme.

Notes to editors

1. This is the second round of funding in the successful Enterprise Capital Funds programme. Last year, £81.2m was allocated to five groups to fund high growth businesses in need of investment.

2. Each of the three groups to receive Enterprise Capital Funds must raise £10 million in private funds before they begin investing in SMEs.

3. For inquiries about each of the three groups, please contact:

* MMC Ventures Limited, Bruce Macfarlane, Tel: 020 7938 2005
Mobile: 077 4702 4212, bruce.macfarlane@mmcventure.com,
http://www.mmcventure.com
* The Dawn Capital Fund, Norman Fiore, Tel: 020 7871 0594
norman@dawncapital.co.uk, http://www.dawncapital.co.uk
* Oxford Technology ECF, David Denny, Tel: 018 6578 4466, Mobile: 079 6843 3650, david@oxfordtechnology.com, http://www.oxfordtechnology.com

4. The approval of these Enterprise Capital Funds is subject to contract, and each group raising the full amount of private capital (£10 million) within six months.

5. Capital for Enterprise will be managed by an independent Board, chaired by David Quysner (current chair of the advisory Capital for Enterprise Board) and accountable to the Secretary of State, John Hutton.

6. More information about Enterprise Capital Funds can be found at http://www.berr.gov.uk/bbf/small-business/info-business-owners/access-to-finance/enterprise-capital-funds/page37473.html

Department for Business, Enterprise & Regulatory Reform
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http://www.berr.gov.uk