Manchester private equity firm NorthEdge Capital has secured a £60m cornerstone commitment from the British Business Bank, in a move designed to unlock more scale-up capital for smaller businesses across the UK’s nations and regions.
The investment comes under the Bank’s new Growth Equity strategy and will be deployed into NorthEdge IV, the firm’s latest regionally focused fund.
For NorthEdge, which has long positioned itself as a champion of founder-led businesses outside London and the South East, the backing represents both capital and a signal of intent.
Lucie Mills, partner at NorthEdge, said: “Our investment strategy has always been focused 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-focused 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.”
Targeting scale-ups in growth sectors
The British Business Bank’s Growth Equity strategy will invest on a fully commercial basis across generalist and thematic strategies, with a focus on funds aligned to the Government’s modern Industrial Strategy and its eight priority growth sectors.
In practice, that means more institutional capital flowing into lower mid-market private equity funds that back scaling businesses in areas such as technology, healthcare and business services.
Chancellor of the Exchequer Rachel Reeves said: “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.”
A regional growth play
Historically, UK institutional capital has been under-allocated to lower mid-market private equity, particularly outside London. The Bank says the new mandate will allow it to make targeted commitments to these funds, crowd in additional private capital and help ensure promising smaller businesses can access the finance required to scale while remaining headquartered in the UK.
NorthEdge’s track record underscores its regional focus. To date, the firm has invested more than £780m into 49 companies across four regionally focused funds. In 2024, its portfolio contributed £656m of Gross Value Added to the UK economy and supported almost 10,000 jobs, with around 70% of that impact generated outside London and the South East.
Fund IV will see NorthEdge investing between £8m and £50m for controlling or significant minority stakes in founder-led businesses and SMEs across the UK’s nations and regions. The fund will also use co-investment structures to support larger transactions and follow-on funding rounds, with the British Business Bank able to participate alongside the main vehicle as a cornerstone investor.
Adam Kelly, managing director and co-head of funds at the British Business Bank, said: “Scaling up smaller businesses in the UK’s Nations and regions is key to achieving the government’s growth mission.
“Under this new Growth Equity strategy, we can back more innovative businesses and crowd in further private capital. We are pleased to make this £60m commitment to NorthEdge under the strategy, backing UK businesses with the finance they need to scale and stay in the UK.”
