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TDC closes SME impact fund targeting north of England at €81m

Published: 9 January 2024

TDC, the UK’s only private debt fund outside of London, has closed its impact fund aimed at small- and medium-sized businesses in the north of England to investors after raising £70m.

Cities in the north of England, including Manchester, have often been left behind in terms of economic investment. | Joe Cleary on Unsplash

The Manchester-based firm had launched its impact fund, aimed at creating jobs in northern England,  in May 2022 after British Business Investments and the Greater Manchester Pension Fund committed a total of £40m (€46m). The extra funding means the fund will be able to offer SMEs in the region loans of between £1m and £7m.

“The investors have now committed an additional £30m, bringing the total to £70m, following strong demand for private credit from the small business community across the north,” TDC said in a press release on its website.

Although the UK is a member of the G7, it has stark regional differences in term of economic growth and income, with a clear north-south divide. If the north of England were a country, it would be second only to Greece for the lowest levels of investment in the 38-member  Organisation for Economic Cooperation and Development (OECD), according to a report published last year by think tank IPPR North.   

Levelling up

During the 2019 general election, the ruling Conservative Party promised British voters it would be “levelling up every part of the UK,” according to the BBC. Since that pledge, the government’s Levelling Up Fund has committed £3.8bn to 216 projects across the regions.  

“Our impact portfolio seeks to meet out twin aims of investing locally and creating a positive impact whilst generating a positive financial return to meet our pension obligations,” said Gerald Cooney, chair of the Greater Manchester Pension Fund.

“TDC is providing support to businesses who have been disrupted over recent years by global shocks with the intention of growing employment opportunities and contributing towards economic growth in the region and beyond,” Cooney said.

Founded in 2015, TDC recently struck a capital partnership with US investor KKR, enabling the lender to take capital under management to over £1bn.

The extra commitment from its investors will enable the TDC Impact Fund “to unlock what the north has to offer the UK as a whole and beyond,” said Gary Davison, managing partner at TDC. “It’s a unique offering that sits alongside our main funds, and reflects our commitment to making the north an attractive place to work for top-tier talent.”

Regional imbalances

“British Business Investments’ objectives are to ensure smaller businesses can access as diverse a range of finance options as possible and to reduce regional imbalances in access to finance,” said Adam Kelly, managing director of British Business Investments, a commercial unit of British Business Bank, the economic development bank of the UK government.

“This compliments TDC’s approach as an alternative lender, supporting the development of Northern businesses which might otherwise be unable to access capital to grow,” Kelly said. “We are pleased to make this further commitment to TDC to help growing smaller businesses in the North to access the additional investment capital they need to scale up.”

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