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£400m Midlands Engine Investment Fund II preparing for 2024 launch

Press release 20 June 2023

British Business Bank invites proposals from potential fund managers to operate the new fund.

A £400m investment fund to support the growth of small and medium-sized businesses across the Midlands is on course to be launched early next year. The Midlands Engine Investment Fund II (MEIF II) is being delivered by the British Business Bank, bringing the total it has specifically earmarked for investment in the region to over £700m since 2017.

The Midlands Engine Investment Fund II is part of the new Nations and Regions Investment Funds, launched by the British Business Bank, which will deliver a commitment of new funding to drive sustainable economic growth, levelling-up of access to finance in the Midlands through debt and equity funds in the region.

This builds on the success of the existing Midlands Engine Investment Fund which has been in operation since 2017, which has helped smaller businesses overcome challenges during the pandemic, supported regional economic growth and highlighted the region’s reputation for innovation.

Since its inception, MEIF has invested more than £200m into the Midlands, supported the creation of more than 2,370 jobs across 595 Midlands businesses, and unlocked £301m of private sector co-investment.1

In 2022, an independent evaluation found that MEIF was responsible for a 73% increase in the headcount of firms supported, 33% of roles created were in research and development and four in every 10 roles were in the top 25% of UK salaries.

This £400m commitment to the Midlands Engine Investment Fund II builds on the success of the first Midlands Engine Investment Fund, which has already supported nearly 600 innovative and ambitious businesses to access the funding they needed to grow.

The new fund will further develop the region’s economic prospects through an increase in the supply and diversity of early-stage finance for small businesses, providing finance for firms that might otherwise not receive investment and helping to break down barriers in access to finance.

The Midlands has a long history of entrepreneurship and by backing entrepreneurs and businesses with growth plans MEIF2 will have a positive impact on the region’s economy. The businesses we back will be creating skilled jobs, fuelling green growth and introducing innovation in products and processes.

Ken Cooper Managing Director, Venture Solutions, British Business Bank

The Midlands Engine Investment Fund II will operate across three tiers: smaller loans (£25k-£100k), debt (£100k-£2m) and equity (up to £5m).

Request for proposals from potential fund managers

The British Business Bank is now inviting proposals from potential fund managers to operate the Midlands Engine Investment Fund II via its website. It expects to appoint fund managers in the final quarter of 2023 and the new fund is expected to launch in Spring 2024.

The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK government. The Bank is establishing investment funds in areas not currently served by the Bank’s existing regional funding programme before launching follow-on investment funds in existing fund areas.

Notes to editors

About the Nations and Regions Investment Funds and The Midlands Engine Investment Fund

The Nations and Regions Investment Funds will increase the supply and diversity of early-stage finance for UK smaller businesses, providing finance to firms that might otherwise not receive investment and help to break down barriers in access to finance.

Operating in a commercially sustainable way the Nations and Regions Investment Funds will deliver a £1.6bn commitment of new funding through investment strategies that best meet the needs of the businesses in their nation or region.

The British Business Bank is responsible for administering the Nations and Regions Investment Funds on behalf of the UK government. We are establishing investment funds in areas not currently served by the Bank’s existing regional funding programme before launching follow-on investment funds in existing fund areas.

£400m has been allocated to provide a second fund for businesses in the Midlands region,   building on the success of the current Midlands Engine Investment Fund.

Midlands Engine Investment Fund II will offer a range of commercial finance options with small loans from £25,000 and equity investment up to £5m. The new fund will cover the entire East Midlands, South East Midlands and West Midlands region.

The Midlands Engine Investment Fund II will have a demonstrable presence across the region linking up with the existing small business finance ecosystem to increase reach and create an impact beyond the funds, helping to boost productivity, innovation and jobs.

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