Bruton: €125m fund to target medium-sized firms that are ‘the backbone of the economy’

The Government will part finance a €125m fund aimed at medium-sized companies mainly in the food, manufacturing and technology sectors.

The Growth Capital fund will be managed by UK-based MML partners. Altogether there are five investors in the fund including AIB, the European Investment Bank, GoldPoint Partners and two US subsidiaries of Cigna Corporation as well as the €25m contributed by Enterprise Ireland.

Jobs, Enterprise and Innovation Minister Richard Bruton said the fund was aimed at companies “that were the backbone of the economy” but needed access to finance.

The scheme is part of the Government’s Action Plan for Jobs and forms part of €2bn in wider financing that has been put together through different funds, according to Mr Bruton.

MML founder partner, Rory Brooks, said the Growth Capital Fund will not be unlevered.

Investments will be in the form of a range of junior debt instruments, including taking equity positions.

The total proceeds of the fund will be invested over the next three years with the average investment timeframe usually four years, he added.

Former executive director of TVC Holdings, Rory Quirke, and former Goodbody Stockbrokers corporate finance executive, Neil McGowan, will head up the MML Growth Capital Fund.

Mr Brooks said the fund will not invest in start-ups, property firms, distressed debt, or “broadly retail companies”.

It would be looking at medium-sized companies that are looking to export, although domestic economy focused companies will also be considered.

“We are in the business of taking big small companies and turning them into small big companies,” he said.

The Irish Software Association (ISA) welcomed the fund but said it was not sufficient to close the ‘equity gap’ for SMEs.

‘[This] announcement sends a strong signal to Ireland’s SME community that the Government recognises the potential of the SME sector to deliver jobs and an innovation-intensive economy,” said Edel Creely, chair of the Irish Software Association and managing director of Trilogy Technologies.

“Mid-stage technology companies, in particular, find it very difficult to access funding from traditional sources.

“The quarterly ISA Digital Technology Index, conducted among 728 Irish CEOs and founders, found that access to finance remains a problem for over one-third of Irish software and digital technology companies.

“Support for the tech SME sector is critical in giving these companies the opportunity to create and to innovate.”

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