Case study: "A one-stop shop" - Growth Capital Fund III

“The backing, advice and expertise which we received from the EIF have been key to our success. We now have the capacity to carry out our strategy and provide flexible structured equity to UK SMEs”.  (Bill Crossan  Managing Partner, Growth Capital Fund III)

EIF has long acted as cornerstone investor in funds which specifically target mid-market technology SMEs, as they offer businesses tailor-made financing solutions to further enhance their development.

The crisis and the scarcity of bank lending made access to financial sources suited to more mature businesses’ specific needs difficult. It, however, also opened opportunities for providers of integrated financing tools. 

Growth Capital Partners (GCP), in which UK mezzanine fund, Growth Capital Fund III, EIF has invested, are one of such providers. They have developed an innovative investment model of combined debt and equity designed as a “one-stop shop” for SMEs which can now get the capital provision they need all from one source of funding.

The hybrid debt/equity nature of the product GCP offer provides an alternative to traditional lending. It is designed to meet the specific financing requirements of companies which are more advanced in their development and is well adapted to long-term financing.

With this investment, EIF addresses the financing needs of SMEs in the UK lower mid-market segment. This is especially relevant under the current market conditions where the volume of transactions in this segment has decreased substantially, in large parts due to the limited availability of debt financing.

EIF is supporting an experienced team whose investment strategy and efficient capital provision model is expected to have a positive impact on SMEs, entrepreneurship and job creation in the UK, thus participating to the market recovery.

EIF also gave GCP the support to build a solid investors and capital base. This transaction underlines EIF’s role in encouraging the best fund management teams to develop and carry out their strategies in an independent way so that SMEs can get the best possible backing they need.