A new £40m fund has been set up to address the “funding drought” within the creative sector.

edgeEdge Creative Enterprise Fund is backed by the private sector, high net worth individuals and a major investment from the Government’s British Business Bank.

The cash will be used to invest in high growth companies within the creative sector, in order to “nurture and assist” their expansion.

“This is the first fund specifically focused on the creative industries backed by the British Business Bank. We look forward to working with Edge Investments, which has extensive experience in this sector and a proven track record,” said Ken Cooper, managing director, Venture Capital Solutions at British Business Bank.

“The creative industry is of increasing importance to the wider UK economy and we are particularly pleased that this fund will ensure these high-growth businesses have access to the finance they need to scale.”

Companies will be given capital and also mentoring skills to promote growth and innovation, so as to provide returns for both the companies and its investors.

The fund is targeting a minimum three times return for its private investors over its 7 – 10 year life.

“The creative industries are one of the UK’s great success stories, an area where Britain excels. Our view is that a high degree of sector knowledge mitigates risk and also allows us to assess the most promising opportunities and most talented executives,” added David Glick, Edge Investments CEO.

“There are nearly 160,000 creative industries businesses in Britain yet despite being in this high growth sector, many of them find it difficult to attract adequate capital to maximise their potential. Our new Edge Creative Enterprise Fund aims to fill that funding gap. Edge Creative Enterprise Fund will bring much-needed growth capital to smaller businesses in the creative industries, and we are grateful to the British Business Bank and all the fund’s investors for their support.”