Liverpool business funder River Capital launches £10m private equity fund backed by parent company MSIF. Tony McDonough reports

Business funding specialist River Capital is launching a £10m private equity fund to support SMEs in Merseyside and across the North West.

Backed with cash from River Capital’s parent company, MSIF, the fund will provide investments between £500,000 and £2m. It will look to support acquisitions, management buy out/in, partial realisations and growth funding.

A subsidiary of MSIF, River Capital was formerly called Alliance Fund Managers. Since 2002 has supported more than 2,000 Liverpool city region businesses with loan and equity investments totalling £163m.

In September it left the offices it shared with MSIF in Exchange Court close to Liverpool Town Hall. Now it has set up a separate base in The Plaza at nearby St Paul’s Square.

In October 2022, River Capital launched an £8m loan fund to support SMEs in the North West and, in particular, Liverpool city region.

Called the Business Growth Loan Fund it provides loans to SMEs of up to £300,000. Liverpool-based River Capital says this is the first of several “impending announcements”. It also launched a dedicated fund for AI investments.

River Capital chief executive Mark Borzomato said: “As with all River Capital’s funds, we are looking to back ambitious management teams.

“The new fund is focused on providing and supporting such teams to acquire the business they work for or fuel its future growth plans be it by acquisition or organic expansion.

“For founders and owners, be they corporate or individual shareholders, the fund would allow them to exit and retire or realise a portion of their wealth and allow the management team to acquire a stake in the business they run.”

The fund will invest across a broad range of sectors and expects to announce the conclusion of its first deal imminently. Daniel Hayhurst, partner at Brabners, advised on the formation.

Mark added: “There is significant evidence private equity backed businesses perform more strongly than others, but often the funds providing such support are focussed on larger transactions.

“We believe there is huge untapped potential in the North West at the sub £2m investment level, or sub £10m transaction level.”