The two investment funds will support small and medium-sized enterprises, aiming to address a funding gap which has hindered local business growth, according to the pension scheme.
The South Yorkshire Pension Authority (SYPA) has announced two new £20m (€23.3m) investment funds to support small and medium-sized enterprises across the region.
The South Yorkshire Debt Fund, managed by FW Capital, and the South Yorkshire Growth Equity Fund, managed by Foresight Group, aim to address a critical funding gap that has hindered business growth in South Yorkshire, according to the SYPA.
Speaking to Impact Investor, an SYPA spokesperson said: “Through impact investing, SYPA seeks to align its investments with local economic priorities, as identified through collaboration with the South Yorkshire Mayoral Combined Authority (SYMCA).
“By leveraging its position as part of local government, SYPA aims to act as a ‘steward of place’, driving positive economic and social outcomes that support the long-term financial security of its members.”
South Yorkshire’s future
Councillor Jayne Dunn, chair of SYPA, stressed the importance of place-based investing as a means of promoting regional prosperity. “By backing local businesses, we are not only fostering economic growth but also creating jobs and driving innovation in our region. This initiative reflects our ongoing commitment to investing in South Yorkshire’s future and ensuring long-term prosperity for our communities.”
While there are no sector restrictions, funding is expected to go into industries where South Yorkshire has a competitive edge, such as advanced manufacturing and technology-led innovation, according to the SYPA.
The South Yorkshire Debt Fund will provide loans of up to £2m towards areas such as working capital, equipment purchases, recruitment, marketing, and product development. Meanwhile, the South Yorkshire Growth Equity Fund will offer equity investments of up to £2m, typically as part of larger funding rounds of up to £15m.
While current allocations align with SYPA’s 2023 investment strategy, further capital may be committed if the funds prove successful. Additionally, SYPA said it hopes to gain the backing of institutional investors in the future.
“A key objective is to use these funds as a catalyst to attract additional private sector investment into South Yorkshire,” the SYPA spokesperson said, adding that both investment managers – Foresight Group and FW Capital – have a proven track record of securing follow-on investment for high-growth businesses, which helps to sustain economic momentum.
“Additionally, both managers will actively support the businesses they invest in, providing strategic oversight and guidance to maximise long-term success,” the spokesperson said.
