Financial and insurance services

Tender description

The purpose of this procurement exercise is to appoint a single provider to deliver an independent investment and corporate finance advisory service in relation to a portfolio of venture capital investments (including a small element of debt funding) in SMEs based in the North East of England. The successful bidder will be responsible for maximising the financial returns from an existing investment portfolio by engaging with management teams to develop realisation strategies, negotiating with interested parties and advising the Board of NEF Holdco on suitable assets for disposal. The contracting authority for this tender is North East Finance (Holdco) Ltd (‘NEF Holdco’). NEF Holdco is the holding fund manager for the Finance for Business North East Fund (‘FBNE’). During its active investment phase between 2010 and 2016, some 160 000 000 GBP was invested in 900 SME businesses in the North East of England. The investment programme was funded in part by a loan from the European Investment Bank ('EIB'), in part by grant funding provided through the European Structural Funds (ESIF) programme and in part through HM Government funding streams. The FBNE Fund was delivered through 7 ‘sub-funds’, each managed by an independent, regulated fund management company. Investments were made in the form of equity, debt or mezzanine instruments and businesses active in a wide range of sectors are included in the portfolio, ranging from micro-businesses to innovative technology firms and established manufacturing and service companies. NEF Holdco has very recently repaid the outstanding loan to EIB and will now focus on maximising portfolio returns for the regional legacy. Returns will be used to underpin existing and future financial interventions designed to support small and medium-sized businesses (SMEs) in the North East. For the purposes of this tender, NEF Holdco is only concerned with 3 of the 7 sub-funds. In these cases, the related fund management agreements and Ltd partnerships terminate in early 2020. The intention is that these arrangements will not be extended and live portfolio holdings will be brought onto the balance sheet of one or more NEF Holdco subsidiary entities. The portfolios in question are: — the North East Technology Fund (currently managed by IP Group/Top Technology), — the North East Angel Fund (currently managed by Rivers Capital Partners), — the North East Growth Plus Fund (currently managed by FW Capital). NEF Holdco is inviting tenders, via an OJEU open procedure, for a single provider to deliver an independent investment and corporate finance advisory service, assisting with the oversight and future realisation of the equity participations (and some element of debt/mezzanine funding, which amounts to only about 10 % of the total value of the portfolio) which will come under the board’s control following the dissolution of the 3 Ltd partnerships. The successful bidder is expected to have an understanding of the key business and technology sectors represented in the portfolio. The contract will be for an initial term of 2 years commencing in Q1 2020 but may be extendable to 3 years on the same terms. Thereafter, depending on need and on progress with the realisation of the portfolio, there may be an option to extend by a further one to 2 years. The contract will be delivered as an investment advisory service rather than through a Ltd partnership structure. Decisions on disposals or realisations of the assets will be reserved to the Board of NEF Holdco or the relevant subsidiary entity, rather than a fund manager being given discretion over investment decisions. NEF Holdco may bring a number of residual investments from other sub-funds into the portfolio after the initial 2 years. This can be discussed as and when the situation arises.