A NEW fund that would invest in small firms from across the region has not become a victim of any cutbacks, despite extensive delays to its launch.

The Northwest Development Agency’s Venture Capital and Loan Fund will utilise European Union regional economic development cash to provide investment capital to small and medium-sized businesses.

The VCLF will receive about £140m from Brussels to invest over a five-year period. The new fund is a similar concept to the Merseyside Special Investment Fund, which has pumped more than £100m into Merseyside firms since its inception in 1996.

However, the launch of the VCLF has fallen behind schedule. The original timetable foresaw that the fund would be up and running by late last year. However, protracted haggling with Whitehall about how best to run it has meant that the NWDA is only now looking to recruit the board that would oversee the fund. It also needs to recruit fund managers to make investment decisions.

“We have to do something. It’s critical that things are in place by the end of this year, otherwise there are sanctions,” said Mr Hough, referring to the fact that excessive delay could mean the cash has to be returned to Brussels.

“The model has been approved by the Treasury and the positive news is we are now able to provide capital and investment for the region’s SMEs,” adds Mr Hough.

He says the VCLF is needed to supplement resources from private sector investors.

“I don’t think that the appetite from companies is satisfied by existing funds,” said Mr Hough.

He describes the VCLF as an “evergreen” fund, meaning it is expected to make sufficient returns to sustain itself in future years. Mr Hough said the new fund should do better than MSIF because it could draw on investee companies from the whole region.