Overall presentation

1
Michele Giddens
Women and EnterpriseMaking Waves 6 November 2003
2
Community Development Venture Capital

• The UK Private Equity Industry
• Social Investment Task Force
• Bridges Community Ventures
• - background
• - operations

3

• Economic Impact of
• Private Equity in the UK

4
Private Equity Backed Companies Create Jobs At A
Considerably Faster Rate Than More Established
Firms

• Over the 5 years since 1996/7, the no. of people
  employed by private equity backed companies
  increased by an average of 23 p.a., against a
  national private sector employment growth rate of
  1.5 p.a.
• It is estimated that private equity backed firms
  account for the employment of around 2.9 million
  people, equivalent to 16 of the current private
  sector workforce.

5
Private Equity Backed Companies Boost The UK
Economy

• Over the 5 years since 1996/7, on average private
  equity backed companies sales rose by 30 p.a.,
  three times that achieved by FTSE 250 companies.
• Exports grew by 20 p.a., compared with a
  national growth rate of just 2.9 p.a. and
  investment rose by 25 p.a., compared with a
  national increase of 2.3 p.a.

6
Social Investment Task Force

• Announced by Chancellor of the Exchequer in
  February 2000. Reported in October 2000
• Chairman - Sir Ronald Cohen of Apax Partners
• Remit of Task Force

To set out how entrepreneurial practices can be
applied to obtain higher social and financial
returns from social investment, to harness new
talents and skills to address economic
regeneration and to unleash new sources of
private and institutional investment. In addition
the Task Force should explore innovative roles
that the voluntary sector, businesses and
Government could play as partners in this area
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Social Investment Task Force

• Recommendations
• A Community Investment Tax Credit (CITC) to
  encourage private investment in under-invested
  communities.
• Community Development Venture Funds
• Disclosure by banks
• Greater latitude and encouragement for charitable
  trusts and foundations to invest in community
  development activities
• Support for Community Development Financial
  Institutions

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Community Development Venture Capital

• Community Venturing combines equity investment
  and entrepreneurial assistance with the goal of
  community development
• CDV Funds in the US date back to the 1970s but
  experienced a surge in the last five years
• Community Development Venture Capital Alliance
• Now over 60 funds, managing over 400 million
• Few exits so far but return estimates are from
  10-15

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Bridges Community Ventures

• Created by two of the largest and most successful
  private equity firms in the UK 3i and Apax
• Why?
• Impact of Private Equity in the UK
• Apply the disciplines of private equity to
  regenerate under-invested areas in the UK

10
Bridges Community Ventures

• Launched in May 2002, funds closed in September
  2002
• Mission led invest for purpose as well as a
  profit
• The first Community Development Venture Capital
  fund in the UK
• 40m fund - 20m from the private sector with
  20m in matching investment from the Government
• Provide venture capital to businesses in the most
  under-invested areas in England
• Must achieve an attractive financial return for
  investors

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Bridges Community VenturesFund Structure

• 20m of Government funds - 9.8 is subordinated
• Drawn down first
• Paid back last
• 5 capped return
• Fund Management fee 3
• 20 Carry with no hurdle

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Bridges Community Ventures

• Role of the Investors
• Board of leaders from the Venture Capital sector
• Access to industry sector expertise
• Access to networks
• Mentoring and support for investees
• Referral of appropriate deals

13
Bridges Community VenturesPrivate Sector
Investors

• 3i
• Apax Partners
• Doughty Hanson
• HSBC
• Lehman Brothers
• Lloyds TSB Scotland
• Merrill Lynch
• Railways Pension Trustee Company
• The Royal Bank of Scotland Group Pension Fund
• Reuters
• Schroder Salomon Smith Barney
• South Yorkshire Pensions Authority
• The Royal Bank of Scotland
• West Midlands Pension Fund
• Entrepreneurs Club

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Bridges Community VenturesInvestment
Qualification

• Our Target Market
• Growth companies located in under-invested
  communities
• Poorest quartile of electoral wards as defined by
  the Index of Multiple Deprivation
• Businesses must be connected with the local
  community
• gt 35 staff live in target wards, or
• Provides products or services that benefit those
  communities, or
• Buys products or services from target wards

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Bridges Community VenturesInvestment Strategy

• Equity investments between 100,000 and 2m in
  any one Company
• All stages considered
• All sectors considered, with emphasis on
  manufacturing, services, media, retail and
  leisure
• Exit horizon 3 5 years, but flexible
• 6 12 Investments a year

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Bridges Community VenturesEntrepreneurs Club

• Invested in Fund
• Co-investment in individual companies offered
• Successful entrepreneurs and business people who
  have cashed out
• Committed to an unpaid non-executive position on
  the board of at least one company and/or
  technical advisory work

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Investments
18
Investments
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Women and Venture Capital

• Few women work in the VC sector
• Many referrers into the VC sector are
  male-dominated
• On average, women-run businesses are more stable
  but less fast growth
• However, female entrepreneurs tend to be willing
  to share ownership

20
Contact Us
Bridges Community Ventures Ltd. 1 Craven
Hill London W2 3EN Tel [phone]
5566 Fax [phone] Web www.bridgesv
entures.com E-Mailfirstname_at_bridgesventures.com