BDO has today announced the first close and launch of Development Capital Fund II which will invest in Irish SMEs with significant growth potential. The investors in the first closing of €75million raised by Development Capital Fund II are the European Investment Fund (EIF), Ireland Strategic Investment Fund (ISIF) and Bank of Ireland.
Following on the success of the BDO Development Capital Fund, Development Capital Fund II will make investments between €2million and €12million in SMEs across a range of sectors throughout the country. Investments are typically for a five-year term. The new fund follows the success of the existing €75m BDO Development Capital Fund which was launched in 2014 and invested in nine Irish high-growth SMEs.
The fund will target companies for investment which are Irish, later-stage SMEs with significant opportunities for jobs and export growth. Typically, companies will be mid-sized, with high-growth potential mainly in export markets with annual turnover in the range of €5million to €80million. The majority of investments are likely to come from ICT/software, industrial/engineering, food and agribusiness; life sciences and clean tech sectors.
Led by BDO Partners Andrew Bourg and Sinead Heaney, who have extensive experience in assisting growing SMEs realise their potential, Development Capital’s investment model is based on backing SMEs’ management teams by providing them with both the funding and experience to unlock and accelerate their growth potential.
Andrew Bourg, a Founding Partner of Development Capital, said: “We are delighted to launch Development Capital Fund II. Based on our experience and track record in the BDO Development Capital Fund, there are many businesses across the country who can unlock and accelerate their growth potential by availing of Development Capital’s investment offering. We have great flexibility in our investment approach and can invest by way of equity, quasi equity or debt. We have a number of pipeline investments identified and are confident that this will build on the track record of success of our first Fund”.
Mr Bourg added: “As a result of the achievements of investees of the BDO Development Capital Fund, we have been receiving on-going enquiries from SMEs and their advisors about potential funding opportunities. As a result, we are completing a first close now to advance these funding discussions.”
Michael Costello, BDO Managing Partner, said: “As a result of the achievements of the BDO Development Capital Fund, there is now a great opportunity for the successor fund to provide much needed capital to high potential, high growth Irish SME’s. We are fortunate to have the leadership of Andrew and Sinead and we are delighted to be partnering in the fund with investors of the calibre of EIF, ISIF and Bank of Ireland.”.
Andrew McDowell, EIB Vice President, said: “The greater the economic uncertainty, the greater the need to back the entrepreneurs and innovators that are working to rebuild a better, more resilient economy and society. That’s why I am delighted that the European Investment Fund, part of the European Investment Bank Group, is backing the new Development Capital Fund II that will ensure that agribusiness, ICT, engineering and industrial companies across the country can innovate and expand even during these challenging times.”
Tom Hayes, CEO Corporate Banking, Bank of Ireland, said: “We are proud to be a partner in this important fund, providing a springboard for Ireland’s high potential SMEs to further develop and enhance their business. Building on the success of the initial BDO Development Capital Fund, we can now enable a new group of businesses to thrive, creating much needed employment and innovation. We look forward to playing our part in helping to reboot the Irish economy by supporting these ambitious SMEs.”