Ryan Bevington
By Ryan Bevington, Investment Director at Maven Capital Partners.
What is the overall outlook for the North in 2021?
A pervasive sense of uncertainty has hung over the UK over the last twelve months though this is now beginning to give way to optimism – and the story is much the same in the North. In fact, with support from the Northern Powerhouse Investment Fund (NPIF), northern-based SMEs are well-placed to help them drive economic recovery in the region and in the UK more broadly. Businesses from northern England have a long history of delivering progress, whether that is in the industrial centres of yesteryear or the life sciences hubs emerging more recently, and resources such as the NPIF help ensure that this rich tradition can continue.
Does the region remain appealing to investors?
Yes, very much so. That much is evident from the sheer volume of deals which Maven alone has overseen in the last year. We recently managed a round of funding in Liverpool-based firm YR Free, for example, which provides a secure platform for sharing digitally recorded media. And it is not just the big cities seeing SMEs receive backing to deliver on their growth potential. In March, Maven helped Cheshire-based compliance SaaS provider iAM Compliant secure a funding package from the NPIF. As long as fund managers possess enough expertise at the local level, promising businesses throughout the region will be supported to embark on the next stage of their development.
Which sectors were the region’s most resilient in the last year?
With the pandemic accelerating major trends such as digitalisation happening across almost all sectors, it is no surprise that tech-related businesses have been the biggest winners over the last twelve months. While some traditional businesses models proved brittle under the strain caused by Covid-19, a high proportion of technology firms benefitted from the shift to online trading, communication and service provision – and they were more resilient because they could easily adapt to the situation. Last year, for instance, communications solutions provider VCG helped establish the IT capabilities of one of the Nightingale Hospitals, augmenting a client base which also includes household names Poundland, Hermes, and Admiral. Meanwhile, another portfolio company, which supplies retailers with pharmaceutical products, was able to use its overseas sourcing expertise to source PPE for customers.
How has the pandemic affected demand for funding in the region?
Finance requests have understandably been far higher in the last year than historically has been the case. While government initiatives such as the CBILS, and now the Recovery Loan Scheme, have had a key role to play, private equity has remained an important source of support for businesses which may not be eligible for those other routes to funding. Similarly, as banks reached certain lending thresholds, financial introducers have sought alternatives solutions, with regionally focused fund managers such as Maven proving particularly popular because of the more intimate understanding of the landscape in which these northern businesses operate.
How might Brexit affect the outlook for the region’s SMEs in 2021?
As with most other regions, the North will experience teething problems as the UK adjusts to the reality of life after the Brexit agreement, with many arrangements still to be worked out. Easing the regulatory burden has been a key priority for a number of our investee companies, with some contemplating investment in a continental base of operations. However, while these challenges are certainly substantial, Maven has been able to support our portfolio so they are best equipped to navigate the uncertain early period of trade with the European bloc.
How have you been supporting businesses through the uncertainty of the pandemic?
As previously mentioned, Maven’s support for our portfolio companies goes beyond financing alone. Indeed, the close attention these firms receive from dedicated managers is often equally valuable for their resilience and growth, thanks largely to the managers’ expertise of business in the region. When it came to the current crisis, therefore, we ensured we spoke openly with clients about how we could support them, adjusting deals as appropriate to try to resolve the specific issues each company faces. This is one of the main reasons why Maven has remained one of the UK’s most active investors in regional SMEs throughout the pandemic.
