THE YFM Group (Yorkshire Fund Managers) has been appointed to run a £9.5m venture capital fund for the North-West.

The Northwest Development Agency (NWDA) has given the Leeds-based firm the job of running its interim small and medium sized business investment scheme while pitches take place early next year for long-term contracts to manage the NWDA’s £149m Venture Capital and Loan Fund (VCLF).

Now expected to be launched in March, the VCLF was originally meant to be up and running a year ago, but has been delayed by bureaucratic wrangles with Whitehall.

Over the next few months, YFM will make equity investments in North West SMEs, using money from the European Union’s Objective 2 economic development programme for the region.

NWDA chief executive Steven Broomhead said: “It has taken longer than anticipated, but we have now adopted a new structure and agreed with government to progress this fund. We will announce more details as soon as we can, but in the meantime we have a sufficient transitional VCLF pot, that will last us until spring, which we have brought forward to ensure there is no gap in public sector VCLF funding in the interim.

“The agreed model for VCLF is taking shape behind the scenes, with the holding company now established and board members appointed. Invitations to tender will be issued during December, and interviews with fund managers will take place early in the New Year.

“We will be appointing four or five fund managers and we aim to have the funds operational and ready for applications from late spring.”

As well as equity investments, the VCLF will lend money to North West firms. The loan part of the fund is to be managed, in the interim, by Liverpool-based Alliance Fund Managers (AFM), who had also pitched to manage the equity fund. AFM’s failure to win the equity part of the fund has resulted in redundancy notices being issued to fund managers based in the Cunard Building. AFM previously managed Merseyside Special Investment Fund, a similar scheme that has run its course.