Bridges Ventures today announces the launch of its sustainable growth fund, Bridges Ventures Fund III (“Fund III”) with a first close on equity commitments of £72m. This sum is almost equal to the final close of the firm’s Fund II.
Fund III continues Bridges Ventures’ focus on the provision of growth capital to small and medium sized businesses (SMEs) in sectors where underlying social or environmental need creates the opportunity for both commercial returns and positive impacts.
The Fund will build upon the success of Bridges’ first two funds (“Fund I” and “Fund II”), which were closed in 2002 and 2007 with fund sizes of £40m and £75m respectively. Through these funds Bridges has developed a focus on four key impact themes: Underserved Areas; Environment; Education & Skills and Health & Wellbeing, where underlying social or environmental problems create an imperative for change and attractive growth opportunities for entrepreneurial businesses.
The first close was achieved with the support of investors that have backed previous Bridges Ventures funds and a new investor, the European Investment Fund, which joins Fund III as the single largest investor to date.
Existing investors following on into this Fund include institutions such as Cooperative Insurance, HSBC Bank plc, West Midlands Pension Fund and South Yorkshire Pensions Authority; private equity backers such as 3i and Doughty Hanson; trusts, endowments and individuals such as Wittington Investments, Merton College, the R&S Cohen Foundation, SHINE – Support and Help in Education, Lesing Nominees, Richard Oldfield, Sir Harry Solomon, and Martyn Webster. Bridges Ventures is now beginning discussions with several potential further investors and Fund III is expected to grow substantially over the coming twelve months.
Philip Newborough, Managing Partner at Bridges Ventures, said: “We are proud to launch this third fund with such strong backing from our existing investors and delighted that the European Investment Fund (EIF) has joined the first close as a new investor with Bridges Ventures.
"To have achieved a successful first close in a difficult fund-raising environment sends a strong signal that, increasingly, investors understand that generating positive environmental and social impact can drive attractive financial returns as well as make a difference.”
Funds I and II have shown strong investment performance, with successful exits to date ranging from 12-216% IRR to the Funds. As described in the Bridges 2011 IMPACT report, Bridges portfolio companies generated 31% year-on-year revenue growth last year, employ 1,481 people, up 8% in the year and almost 90% of the Funds’ investment has gone into the most deprived 25% of the country.
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