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The state-backed British Business Bank will ask for more liquidity in the Chancellor’s regional development budget to support the government’s ‘leveling’ program after overseeing a tenfold increase in its portfolio last year .
The BBB oversaw much of the UK’s Covid-19 business support program in 2020, including the £ 47 billion ‘rebound bank’ loan program, significantly expanding its remit. The UK’s National Economic Development Bank now manages £ 89bn in financial support to 1.8m businesses, up from just £ 8bn in 2020.
The bank will seek additional funds from the Chancellor during the fall spending review to support regional development and expand the start-up loan program.
Catherine Lewis La Torre, CEO of BBB, declined to comment on the request for regional funds, but added that she wanted to “step up” the start-up loan program given its growing importance in supporting businesses across the country. UK.
She added that the government had already seen a “surprise” in the financial performance of its existing portfolio.
The group will say on Wednesday that its £ 8.5 billion non-Covid investment portfolio, which has supported nearly 95,000 small businesses, has resulted in a return to taxpayer of nearly 15%.
These investments are made by supporting lenders, venture capital funds or directly from national start-ups.
BBB’s investment portfolio has benefited from the surge in technology valuation over the past year, given its stakes in fast-growing groups, such as virtual events company Hopin.
The BBB also oversaw the UK’s start-up support program, which granted more than 11,000 loans last year. The bank’s regional funds – investment funds Northern Powerhouse, Midlands Engine and Cornwall and Isles of Scilly – have provided £ 357million.
£ 89 billion
of financial support to 1.8 million companies is managed by BBB
She highlighted the success of its UK arm Patient Capital, which can invest up to £ 2.5 billion in innovative groups through external fund managers or directly into start-ups.
“The financial performance is really a reflection of the underlying equity portfolio which is now starting to show the first signs of progress being driven by a number of amazing companies.”
The division is also overseeing the government’s new £ 200million life sciences investment program, which La Torre said was close to closing its first two deals.
“This is relatively limited capital – two to four investment opportunities. We are quite confident that £ 200million will be well invested, and in a reasonably short period of time as well. “
The BBB has said that managing the vast portfolio of Covid-19 loans and equity investments on behalf of UK taxpayers will be an important part of its role in the years to come.
The bank also oversees the government’s Future Fund program, which co-invests in start-ups using convertible loans and has made the group the UK’s largest provider of venture capital.
La Torre said 40 more start-ups were in the process of converting these loans into equity, which would bring the government’s stakes in small businesses through the program to more than 200. She added that a decision would need to be made. take over the future ownership of the £ 1.1 billion fund.
“But I think they’ll want to see as we do what the size and shape of this wallet is.”
The BBB was still “investigating” loans made by Greensill Capital to the Sanjeev Gupta steel empire under state Covid-19 programs. “I think this one will work and will work, and we are still in the investigative part of the process,” La Torre said.