Investment grows

BGF delivers strong returns in ‘resilient market’

Paddy Graham
Patrick Graham: quality portfolio (pic: Terry Murden, DB Media Services)

BGF, the growth capital investor, said its Scotland and Northern Ireland team delivered a strong rate of return in 2023 in a market showing “remarkable resilience”.

The Edinburgh-based branch of the company invested £33 million into growth businesses and concluded five exits at a total value of more than £260m, delivering a combined money multiple of 2.3x.

The exits included Kick ICT and STATS (UK) – the latter being the company’s first investment in Scotland.

BGF invested £16m in STATS between 2012 and 2023, enabling the company to expand its international footprint. As a result, the business more than quadrupled revenues and generated a very healthy return for stakeholders on exit. The Kick ICT exit was completed in the latter half of 2023, delivering BGF a strong internal rate of return (IRR) of 38%.

Local investment activities have helped to support acquisitions, new product development, roll-out strategies and succession planning, as well as directly providing working capital and strengthening balance sheets for portfolio companies.

Scottish deals included an £8m investment into EV charging firm Trojan Energy, £4.5m investment in tech firm Stellar Omada, and an injection of £2m into STC INSISO, a software solutions company.

Follow-on investments included support for Scottish Dental Care Group and marketing technology company MRM Global (re-branded to Hyble).

Patrick Graham, BGF’s head of Scotland and Northern Ireland, said: “I’m very happy with the performance the  team has delivered this year, particularly given the economic backdrop.

“Over the last year, we’ve backed a diverse range of brilliant businesses with both new and follow-on funding packages. At the same time, we secured strong exits from five portfolio companies, delivering us a strong rate of return. The results of our 2023 activity demonstrate not only the success of BGF’s investment model but also the quality within our portfolio.”  

He added: “In 2024, BGF will continue to help ambitious businesses realise their growth potential. We know that the general market outlook in Scotland, and indeed globally, continues to be challenging.

“However, despite the wider market picture, we are confident in our pipeline of deals because it is built on established relationships and a deep understanding of the local SME market which continues to show remarkable resilience despite what is thrown at it. The variety of success stories we have had in 2023 underlines this.”

Across the UK, BGF backed 44 businesses and invested £430 million across the UK and Ireland in 2023.

In December 2023, BGF achieved B Corp status, further bolstering its long-standing commitment to creating a positive impact both within the organisation and across the wider economy.

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