New €125m First Development Capital fund in Ireland to invest in SMEs

4 Nov 2013

Rory Brooks, founder partner, MML Capital; Minister for Jobs, Enterprise and Innovation, Richard Bruton, TD; and Julie Sinnamon, CEO, Enterprise Ireland, at the launch of the €125m First Development Capital. Photo by Gary O'Neill

The Irish Government has announced a new €125m investment fund – dubbed First Development Capital – to invest in Irish small-to-medium-sized enterprises (SMEs), the Minister for Jobs, Enterprise and Innovation, Richard Bruton, TD, has announced.

MML Growth Capital Partners Ireland will manage the €125m fund, which will be used to help innovative and export-driven SMEs scale up faster, reach new markets, and ultimately create homegrown jobs for Ireland.

Broken down, Enterprise Ireland has made a €25m commitment, under the Government’s Development Capital Scheme, to the first and final close of the fund. This scheme was set up last year.

As part of the fund, a total of €75m in funding has been made available from the Department of Jobs, Enterprise and Innovation through Enterprise Ireland.

The balance of the funding has been committed by Allied Irish Banks, the European Investment Fund, GoldPoint Partners, and two US subsidiaries of the Cigna Corporation.

Goal – to match the €150m with at least €150m from private sector

Another aim is to leverage at least €150m in additional funding from the private sector.

Today’s announcement represents the first fund launched under the scheme, and investments in Irish SMEs are to kick off shortly. Neil McGowan and Rory Quirke will lead the MML investment team.

Making the announcement today, Bruton said the determination to support the “development of a powerful engine” of Irish enterprise is at the heart of the Government’s Action Plan for Jobs.

“Ireland has a strong tradition of successful homegrown businesses of this type, and increasing the availability of risk capital for them is critical in ensuring that they can scale sufficiently to compete in international markets, growing exports and jobs,” said Bruton.

He said the first funds under this scheme would now start going into the market.

This, explained Bruton, will mean that more companies will be able to access the required development capital, so they can expand into export markets and create the jobs Ireland needs.

In terms of the Development Capital Scheme, its setting up has been a “critical” action under the Action Plan for Jobs.

The goal here is to increase the availability of risk capital and close the equity gap SMEs are experiencing when looking for risk capital in excess of €2m.

The Development Capital Scheme forms part of the suite of new finance measures put in place through the Action Plan for Jobs, which will make a total of more than €2bn in additional funding available to Irish companies of all sizes over the coming years.

Julie Sinnamon, CEO, Enterprise Ireland, said commercial funding is a critical component for Irish businesses to scale and create jobs.

She added that the amount and quality of the international private capital raised for this fund is testament to the investment opportunity for Irish SMEs.

Rory Brooks, founding partner of MML Capital, said the aim is to invest between €2m and €12m in well-managed businesses that have clear growth and development prospects.

“We have put in place an experienced team led by Neil McGowan and Rory Quirke, to source growing companies which, with investment, can realise their potential. Ireland’s economic recovery is now definitively under way and the timing and focus of this fund could not be better.”  

Carmel Doyle was a long-time reporter with Silicon Republic