North of Tyne Combined Authority Fund Manager for Venture/Equity Fund

Tender description

On behalf of North of Tyne Combined Authority ("NTCA") (see section VI.3 of this notice), North Tyneside Council (the "Procuring Council") is conducting a procurement of a fund manager in respect of a venture fund it is establishing to improve access to finance for high-growth potential organisations based in North East region of England (the "Fund"). The Fund is estimated to have an initial value of c.£30m, composed of £10m of funding from NTCA and £20m being co-investment finance to be raised by the fund manager. The fund manager will be responsible for executing deals and managing the Fund during the 10 year funding cycle. Provided additional funding is secured, the total Fund value could exceed £100m. While the estimated range of value for the contract is explained in this notice, NTCA is unable to give a definitive contract value as this will depend on the scope of the final services required and total value of the Fund. Further details are contained in section II.2.3. Lot 1: The procurement documents are available to view and download at: https://procontract.due-north.com/. Bidders are required to submit their tenders by noon on 21 July 2022. Full details of NTCA's requirements are set out in the Invitation to Tender ("ITT"). The Fund should support companies at any stage in the business life cycle which are engaged in innovation or developing disruptive business model, with a particular focus on innovative start-ups and early-stage growth businesses linked to key economic growth opportunities in the North East region of England. The focus of the Fund should primarily be on early-stage investment (seed, late seed and series A). This may include initial investments, as well as subsequent follow-on investments into businesses that have received earlier stage investment from the Fund. The Fund will primarily invest in projects in the NTCA region with expansion into projects outside the region where certain conditions, as set out in the ITT, are met. For example, as a result of ongoing dialogue with Government around a wider devolution deal for the region (and therefore such devolution may establish a successor authority, to which this procurement naturally relates). The legal structure of the Fund will contain a mechanism to allow any Contracting Authority or any Body Governed by Public Law (as defined in the Public Contracts Regulations 2015), including local authorities and any public sector pension funds, to invest in the Fund and access the fund manager. It is estimated that the Fund will commence investment once achieving a first close scale of £30m, which will be comprised of: 1) £10 million of funding from NTCA; and 2) a minimum of £20 million co-investment finance, expected to be raised and leveraged by the fund manager (which will be required to unlock the first close of the Fund and commence investment). The Fund is estimated to have one 10 year funding cycle (although the exact duration of the Fund's operation is to be determined by the preferred bidder), though the draft contract contains options following conclusion of this initial funding cycle. The contract will also allow for early termination of the Fund and/or the exit of NTCA's investment should the Fund not achieve its key mobilisation and co-investment milestones prior to commencing investment. Revenue for the fund manager's services shall be determined in accordance with principles further detailed in the ITT. This procurement is intended to cover the initial value and scope of the Fund together with any increases in the scale of the Fund as a result of additional resources being secured. Interested organisations should use this information to aid in their estimation of the revenue likely to be generated. The services anticipated to be required by NTCA for the fund manager services are summarised below (though see the ITT for further information): 1) financial and investment services; 2) business services; and 3) fund management services. To help to ensure that sufficient interest in the contract will be generated, the services being procured will not be divided into separate lots.