Financial and insurance services

Tender description

The purpose of this procurement exercise is to appoint a fund management organisation to take over the management of a portfolio of venture capital investments in SMEs based in the North East of England. The successful bidder will be responsible for managing, reporting on the performance of and maximising the financial returns from an existing investment portfolio, over a period of approximately 30 months. North East Finance (“NEF”) is the holding fund manager for the Finance for Business North East (“FBNE”) programme: a suite of 7 venture capital and loan funds which was established in 2010 to provide investment finance to SMEs based in the North East of England. NEF was established under the European Commission/European Investment Bank (“EIB”) initiative known as JEREMIE: Joint European Resources for Micro to Medium Enterprises. Since its launch, NEF secured 160 000 000 GBP of funding for investments from the EIB, the European Regional Development Fund and the UK government, which was invested in over 900 companies from 2010 to December 2016. The contract to be awarded pursuant to this Contract Notice relates principally to the management of the FBNE Technology Fund. To date, it has been managed by Top Technology Ventures (“TTV”) but, due to its decision not to tender for management contracts from the successor to the FBNE programme, TTV has agreed with NEF that it will better suit the interests of all parties to transfer responsibility for the Technology Fund to a new fund manager at this time. Between 2010 and December 2016, the Technology Fund invested 31 000 000 GBP in 70 companies via investments ranging from 5 000 GBP to 2 100 000 GBP, including follow-on investments. The investments have in aggregate leveraged 38 000 000 GBP of additional private investment into the Fund’s portfolio. All investments were made in technology-oriented SMEs based in the North East of England (comprising Northumberland, Tyne and Wear, County Durham and Tees Valley). To date, the Technology Fund has returned in total c. 9 500 000 GBP and, as a result of exits, investee failures and write-offs, its portfolio now consists of 25 active investments. A summary of the portfolio is included in the draft invitation to tender document which is available for all prospective suppliers to review; full details of the portfolio will be made available in a secure data room to those prospective suppliers which pass the Selection Questionnaire stage of this procurement process. The contract will require the successful bidder to manage the Technology Fund portfolio to assist its investee companies to grow and to maximise and realise value from the portfolio while providing regular reports to NEF on the performance of the portfolio assets. The technology fund is fully-invested and it is not envisaged that any additional capital will be available to facilitate any further follow-on investments by the fund in its portfolio. NEF is procuring the contract on terms which will permit additional investments from other funds in NEF's portfolio to be transferred into the technology fund and be managed by the successful bidder — but such additional service requirements are not anticipated at this time.