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Noble Fund Managers announces first close for second venture finance fund

Noble Fund Managers has announced the first close of its second venture finance fund, Noble Venture Finance II, leaving only GBP13m to reach fund’s target of GBP100m.

Noble Fund Managers has announced the first close of its second venture finance fund, Noble Venture Finance II, leaving only GBP13m to reach fund’s target of GBP100m. The fund will be more than twice the size of its predecessor, which was raised in 2003, and including reinvestment, the fund will be able to commit as much as GBP350m over its lifespan.

NVF II will typically provide debt and working capital finance of between GBP1m and GBP5m to venture capital stage companies across Europe in the form of loans, leases or hire purchase facilities, through multiple tranches. NVF II will also receive equity rights, typically through warrants.

Noble’s first venture finance fund has committed more than GBP40m to 20 companies in eight European countries. Three of these have already resulted in exits through trade sales to public companies, generating a gross internal rate of return of 16.4 per cent, 32.9 per cent and 39.1 per cent respectively.

‘We are delighted to have completed the first close of Noble’s second venture finance fund,’ says Mark Taylor, head of Noble Venture Finance. ‘The new fund allows us to scale up our operations, in terms of both the size of our team and the number and scale of the investments we make, at the same time as the venture market continues to increase activity.’

Noble Venture Finance is part of Noble Fund Managers and one of only a small group of venture debt providers in Europe. It was founded in 2003 by Taylor, who set up Europe’s first venture debt fund for Dresdner Kleinwort Benson in 1998.

Henry Chaplin, chief executive of Noble Fund Managers, says: ‘The market for venture debt has become firmly established in Europe and before long it will reach the same levels as the US has been experiencing since the 1990s.’

Venture finance typically comprises leases, loans or hire purchase facilities to provide working and/or fixed capital for assets such as manufacturing equipment, computers, telecommunications systems, laboratory testing, measurement and other equipment.

Returns are made up of transaction fees, monthly payments and an equity kicker. On investing, NVF seeks warrants or share options in the company that are usually exercised in the event of a trade sale or public offering of the investee company.

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