British Business Bank publishes a list of 67 additional companies in which the Future Fund holds an equity interest, taking total equity holdings to 591 as at 30 June 2023.
The list includes Ystrad Mynach based Transcend Packaging Limited, a sustainable packaging company manfuacturing products for big names including Ribena and McDonald’s, and Cardiff based Licentia Group Ltd, which provides IP licensing and technology services.
The rate of conversions in Q1 2023/4 increased compared to the previous quarter, with 67 new additions. Similarly, the number of insolvencies continued to grow in this quarter, with 18 new insolvencies added. This comparative increase in corporate activity is in part due to outstanding Future Fund loans nearing their three year maturity date as well as wider economic conditions.
Ken Cooper, Managing Director, Venture Solutions, British Business Bank said:
“The Future Fund was created to ensure a flow of capital, at the height of the pandemic, to companies that would otherwise have been unable to access government support schemes, while ensuring long-term value for the UK taxpayer. The Future Fund is now entering the maturity phase, which signals three years since the first loans were executed. The comparative increase in activity this quarter is in part due to outstanding loans nearing their maturity, as we contact companies with outstanding loans in advance to set out the options available to them.”
Launched on 20 May 2020, and open for applications until 31 January 2021, the Future Fund issued 1,190 companies with convertible loans worth £1.14bn in total. Third-party investors were required to at least match the Future Fund’s investment.
The Future Fund supported UK companies that typically rely on equity investment to fund their growth. By creating a bridge to the next equity funding round, the Future Fund supported these companies through a period of considerable economic disruption and now the recovery.
The scheme used a recognised financial instrument known as a convertible loan. Unlike an equity investment, there wasn’t a requirement under the convertible loan to value the company or the price of its shares, at a time when company valuations had been significantly impacted by Covid-19. Instead, the convertible loans are designed to convert into equity either at the next equity funding round or if the company is acquired through a sale or IPO.
Breakdown of the total portfolio as at 30 June 2023
