Investor BGF is exploring an external fundraise for the first time and says it could raise £500 million from institutional investors next year.
The UK and Ireland’s most active growth capital investor says it is looking at providing new institutional investors with the opportunity to invest in UK growth companies through its regional platform.
BGF’s existing shareholders are Barclays, HSBC, Lloyds and NatWest. It has delivered a 21.4% internal rate of return since 2016 and aims to invest more than £3 billion over the next five years.
Lazard has been appointed to advise BGF as it explores its options.
To date, it has invested more than £4.7bn in over 600 businesses, creating over 27,000 new jobs and helping to generate £7.1bn in revenue growth. An impressive 74% of the capital deployed by BGF has been outside of London and the South East.
BGF was established to fill a long-standing gap in the investment market by backing growth-ready small and mid-sized businesses across all regions of the UK.
It also aligns with the Mansion House Accord, which encourages long-term investment by UK pension schemes and other institutions into high-growth UK enterprises.
“The case for supporting this country’s ambitious entrepreneurs is clear and one recognised by government as a priority,” said Andy Gregory, CEO. “Over the past decade, we’ve proudly backed hundreds of founder-led businesses, supporting them with the capital and expertise they need to scale and succeed.
“These companies are the backbone of our economy, and it is vital that they receive not only funding but also the support required to thrive.
“We are now in the early stages of exploring a capital raise that could unlock further sources of funding into this crucial segment of the UK market. We know that institutions such as pension funds are keen to work to the Mansion House Accord, channelling long-term institutional capital into UK growth companies.
“Thanks to the continued support of our shareholders, we have the platform, the capacity and the proven expertise to be the partner of choice for investors looking to back ambitious businesses. As part of our £3 billion commitment have the capacity to take on £500 million from institutional investors over the course of 2026.”
In recent months, BGF has seen strong momentum across exit activity including OrganOx, the Oxford-based organ preservation specialist, which reached a landmark $1.5bn valuation in UK MedTech, delivering a return of £175m on BGF’s £35m investment. Monodraught, the Buckinghamshire green tech ventilation and cooling business, was valued at £56m and generated a 11x return on BGF’s investment. Further recent exits include Brisant Secure, Fulfilmentcrowd and Braidwater.