The small business fund set up by Britain’s biggest banks as part of an industry charm offensive will announce tomorrow the recruitment of another executive as it rebuffs political sniping about its contribution to the economic recovery.
I understand that the Business Growth Fund (BGF), which was set up last year with £2.5bn of capital from five major lenders, will say on Friday that it is appointing John Swarbrick as its first head of portfolio.
Mr Swarbrick will join from LDC (Euronext: LOUP.NX - news) , the private equity division of Lloyds Banking Group (LSE: LLOY.L - news) , the taxpayer-backed bank that is also one of the founding shareholders in the fund.
His arrival will come as the BGF finalises a new round of deals amid criticism from some quarters that it is failing to invest its cash-pile quickly enough to make a difference to Britain’s stuttering economy. Labour politicians have questioned whether it can hope to satisfy Coalition aims that it helps to fill the “equity gap” confronting many small and medium-sized companies unless it invests the capital more aggressively.
Launched in May last year, the BGF has so far invested less than 5 per cent of the money available to it, and has injected funds into only 18 companies, the latest of which was Broadbandchoices.co.uk, a price comparison service.
The BGF has rejected suggestions that it is failing to act with sufficient urgency, and says it expects to double the number of companies in its portfolio during the next year. Eventually, it is likely to have several hundred investments at any one time, and is under no pressure to sell stakes during a typical private equity investment period because it has no shareholders other than the quintet of banks.
Among the BGF’s other investments is Shuropody, a footcare specialist, and Wear Inns, a pubs group in Yorkshire and the north-east.
Sir Nigel Rudd, the industrialist who chairs the owner of Heathrow Airport, has chaired the BGF since its inception and is expected to be asked by the Government to assist with the establishment of its new business bank, plans for which are being drawn up by Whitehall officials.
The BGF declined to comment ahead of Friday’s announcement.