The British Business Bank has announced a £60m cornerstone commitment to NorthEdge Fund IV, marking a significant milestone for its new Growth Equity strategy.

This new mandate allows the government-owned development bank to invest in private equity funds specifically targeting smaller businesses. Operating on a commercial basis, the strategy focuses on funds aligned with the eight high-growth sectors identified in the UK Government’s modern Industrial Strategy.

Unlocking Regional Capital

The initiative aims to address historical gaps in UK-based institutional capital, particularly for "lower mid-market" firms—typically SMEs with significant growth potential that require equity rather than traditional debt. By anchoring these funds, the British Business Bank intends to "crowd in" additional private sector investment, ensuring promising firms can scale without moving their operations abroad.

NorthEdge, a private equity firm headquartered in Manchester, has a long-standing track record in the North of England. To date, it has invested over £780m into 49 companies across four regionally focused funds. In 2024 alone, its portfolio contributed £656m in Gross Value Added (GVA) to the UK economy and supported nearly 10,000 jobs. Notably, 70% of this economic impact was generated outside of London and the South East.

Sector Focus and Scale

Fund IV will enable NorthEdge to back founder-led businesses and SMEs across the UK regions, with a primary focus on:

Technology
Healthcare (Life Sciences)
Business Services

Investment sizes will range from £8m to £50m for controlling or significant minority stakes. As a cornerstone investor, the British Business Bank will also have the option to participate in direct co-investments alongside the fund for larger deals.

Leadership Perspectives

We are pulling every lever to boost growth – making record investment in our infrastructure and public services, unlocking opportunities for companies through major trade deals, and supporting innovative businesses to start, scale and stay in Britain through our modern Industrial Strategy. This major commitment from the British Business Bank to NorthEdge will drive even more growth – unlocking millions of pounds of investment for smaller UK businesses to expand, create new jobs, and keep our country at the cutting edge of frontier tech, life sciences and business services.

Adam Kelly, Managing Director and Co-Head of Funds at the British Business Bank, noted that backing regional innovation is central to the government's growth mission. Under the new strategy, the bank aims to provide the necessary finance for businesses to remain rooted in the UK while competing globally.

Lucie Mills, Partner at NorthEdge, said: “We are delighted to have the support of the British Business Bank as a cornerstone investor for NorthEdge IV. Our investment strategy has always been focussed on building businesses of national and international importance from the UK regions, so it is fantastic to have a leading UK institution backing a UK-focussed fund – reinforcing our shared commitment to driving growth across the Nations and regions of the UK. The British Business Bank’s support, alongside the support from a number of our existing investors and LGPS Funds, enables us to continue partnering with ambitious businesses and management teams to deliver meaningful regional and economic impact.”