A meeting of North East entrepreneurs
Last week, BGF hosted a lunch at Rockcliffe Hall in Darlington, bringing together the chief executives of a number of the businesses we’ve backed in the North East including Broadband Satellite Services, J&B Recycling, Altec Engineering, Chemoxy, Wear Inns and Cussins.
The region’s becoming quite a “BGF” cluster.
Of course, the way we invest is completely location agnostic – businesses can be headquartered anywhere in the country (in fact, they must be: we’re the only commercial equity investor dedicated entirely to UK headquartered businesses, and that goes for our ventures arm too). Our most northern investment is in Keenan Recycling, based north of Aberdeen, and our most southern is Sub10 Systems (now part of Fastback Networks), based in Newton Abbot in Devon. We have eight offices throughout the UK meaning that we’re close to local business communities.
There’s been a lot of activity in the North East over the past year, with some common themes emerging from our discussions with businesses located there, namely quality, diversity and ambition.
Firstly, on quality, all of the businesses we’ve invested in have revenues of at least £5m at the time of our investment (Chemoxy is the largest business we’ve backed in the region, with revenues of around £50m when we invested). All have detailed but clear strategies for how to grow revenues or profitability. These are being delivered by exceptionally strong management teams with the support of first class Chairmen.
Secondly, take our investments as an indication of the diversity in the region: a house builder, a global satellite communications company, a chemicals manufacturer, a pub chain estate.
This diversity is important, and positive. The region’s steel industry suffered a substantial and potentially irreversible setback this week and it will take time for the knock-on effects of this to settle. But it also serves as a stark reminder that longer-term, all regions need a diverse sector base which, for the North East, will likely draw on its industrial heritage but look to where it can house and encourage hi-tech or lean manufacturing, as well as newer types of service providers.
Finally, BGF invests in ambitious entrepreneurs and management teams – and we talk about our biggest competitor to this being the option that businesses have to ‘do nothing’.
But our discussions with the North East’s entrepreneurs would suggest that ambition certainly exists. Those we have invested in are continuing to navigate through the current business climate and their enthusiasm and drive to achieve growth, take some calculated risks and build bigger businesses hasn’t been dampened. Happily, that much was clear at our gathering in Darlington.
Attendees from BGF included Stephen Welton (CEO), Andy Gregory (regional director, North, North Wales and Northern Ireland), John Swarbrick (head of portfolio) and investors Richard Taylor, Chris Boyes and Barry Jackson.