One of Britain’s biggest growth investors is committing more than £3 billion to back UK companies, including £200 million to Scottish businesses, over the next five years.

The new funding compares with £2.3bn allocated between 2020 and 2024 and BGF is understood to be talking to the pensions industry on how they could work together.

The investor, formerly known as the Business Growth Fund, was established to invest equity capital, taking stakes of up to 40% but without loading firms with debt.

It has provided about £4.5bn for about 600 investments, with 370 of those live in the portfolio, and is committing at least £300m of its new funding to businesses led by women, though they may note that this still represents only 10% of the total.

The main shareholders in BGF are the big clearing banks Barclays, Lloyds, Royal Bank of Scotland and HSBC, along with the government.

Andy Gregory, its chief executive, said the group had enjoyed an encouraging 2024 despite broad economic issues and uncertainty among target companies and potential buyers, as well as a lack of confidence and low tolerance of risk among other investment firms.

BGF has always highlighted its spread of activity across the UK and the variety of sectors it selects, including those often overlooked by other equity investors that tend to focus on technology.

Mr Gregory said it is “backing British business through the cycle” and said three-quarters of its investments are outside the southeast.

Paddy Graham, regional Partner, Scotland and Northern Ireland, said: “Scotland has long been recognised for its innovation and entrepreneurial energy.

“Our new £200 million commitment builds on a strong foundation and is focused on unlocking even more opportunities for Scottish scaleups to thrive.”

The firm’s Scotland and Northern Ireland office invested close to £50 million in 2024 and announced three exits at Kick ICT, Keenan Recycling and AFG Media – best known for Morphsuits. Its current portfolio includes Strathberry, the Edinburgh-based fashion accessories brand.

New Scottish investments included Sulmara, a provider of survey and inspection services to the offshore wind and energy markets; Glasgow-headquartered renewables business Glacier Energy; and EV charging specialist Trojan Energy.

BGF also completed a minority investment enabling the acquisition of Dundee-based JTC Furniture by Woodland Kitchens Group.

Angel investment holds steady

Scotland’s angel investors maintained their support for emerging SMEs, according to the latest annual data from the national association.  Read more here