Scottish

Investment Bank -

Overview

February 2015

Background to SIB

• 2009 First Minister announced establishment of a

Scottish Investment Bank

• 2010 SIB launched from SE’s Equity Fund operations

division

• Operates on a Scotland-wide basis

• Partnership with wider SE & HIE business development

activity

Operating Plan 2012-15

Remit

• Support the development of Scotland’s private sector SME

funding market to ensure that both early stage and

established SMEs with growth and export potential have

adequate access to growth capital

Rationale

• To address specific market failures/gaps in the growth

capital market for this cohort of companies where

intervention will have a demonstrable positive impact

Growing the Investor Base

• Bringing in new private investors, both local and

international

• Angels, VCs, Corporates

• examples include recent work with SR One

(corporate venture arm of GlaxoSmithKline) & Dow

Venture Capital

• Develop, grow and professionalise angel syndicates

alongside LINC Scotland

• Pilot Initiatives

• Gabriel Investment Syndicate project

SIB’s Current Interventions

• Financial Readiness Advice

• Growing the Investor Base

• Suite of Equity Investment Funds

• Scottish Loan Fund

• Delivery of the Scottish Plastics Loan Fund

• Delivery of the Renewable Energy Investment Fund

• Investment into a Scottish Life Sciences Venture Fund

• Portfolio Management

Financial Readiness Advice

• Recognised source of independent business advice for

growth companies

• Team of specialist advisors work with companies to

• guide through complexities of various finance options

• identify appropriate finance

• support on securing finance

• provide access to relevant public sector support

• C.400 companies assisted pa

SIB’s Equity Investment Funds

Partners introduce deals to SE to be

matched subject to diligence and

negotiation.

£500k - £2m£2m - £10mScottish

Venture

Fund

Partners are vetted, the SCF will match

all qualifying investments from

registered partners subject to

eligibility.

£100 - £1m£500k - £2mScottish

Co-investment

Fund

Targeted at early stage deals, external

investors usually required, debt and

equity options.

Up to £250kUp to

£500k+

Scottish

Seed Fund

Key FeaturesSIB

Participation

Transaction

Size

Maximum transaction size £500k £2m £10m

SCF

Up to £1m

SVF

Up to £2m

SSF

Up to £250k

SIB’s Equity Investment Funds

• Co-investment with private sector partners

• Gap investors – no displacement or crowding-out

• Fully Commercial – equal rights

• Commensurate economic benefit

• Restricted activities

• Public sector contribution ≤50%

• Voting shareholding <30%

• Annual investment c. £30m

Scottish Loan Fund (SLF)

• Established March 2011

• Current fund capital value - £113m

• Public sector capital (includes ERDF & HIE) - £55m

• Investors – Lloyds, RBS, Santander, Clydesdale, Strathclyde

Pension Fund, Aberdeen City Council Pension Fund

• Independent fund managers – Maven Capital Partners

• niche product

• targeted at growth and export companies

• mezzanine loans £250k - £5m

• SMEs annual turnover of £1m+

• investment to date c.£32m (c£41m committed)

• 17 companies

Scottish Recycling Fund

• Launched September 2012

• In conjunction with Zero Waste Scotland

• Response to address the current shortage of plastics

sorting and recycling capacity in Scotland

• Current fund capital value - £3.8m

• Loans for capital investment £50k to £1.25m

Renewable Energy Investment Fund (REIF)

• Launched October 2012

• ‘Team Scotland’ approach across public sector

• Promote energy from renewable sources and drive further

investment into renewables

• Priority sectors – marine, community owned renewables,

district heating

• Fund capital value - £103m to be invested by March 2016

• REIF products include – loans, equity, guarantees

Scottish Life Sciences Fund

• Launched January 2013

• New Scottish based Venture Capital Fund

• Managed by Rock Spring Ventures, life science sector

investors

• Focus on early stage life science and health technology

companies

• Target Fund size - £50m, first closing of £26m

• SE investment of £5m alongside EIF as lead investor and

Glasgow, Edinburgh and Aberdeen Universities and

Strathclyde Pension Fund

Portfolio Management

• Work closely with management teams, co-investors and SE &

HIE colleagues

• Support development of growth companies

• agree and deliver strategy

• shape and enhance management and board composition

• appoint Non Executive Directors

• access to networks and contacts

• Integral part of Account Teams – joined up/value add/team

Scotland

• Seeks to optimise economic and commercial returns

SIB Private Sector Investment

Partner Examples

SIB Portfolio Companies

For all general

enquiries

telephone Scottish

Enterprise on

0845 687 8787

Contact Email -

SIBAdmin@scotent.co.uk

For more

information about

The Scottish

Investment Bank

visit

www.scottish-

enterprise.com/sib

Scottish Enterprise can also be

followed on Twitter at

twitter.com/Scottish Enterprise

Gary Torbett

Financial Readiness Specialist

Scottish Investment Bank

gary.torbett@scotent.co.uk

0141 242 8400

Scottish Enterprise

Atrium Court

50 Waterloo Street

Glasgow

G2 6HQ