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BGF Achieves Record-Breaking Annual Results in 2021

BGF News 06.14.2022

BGF has reported record results in its 2021 Annual Report and Accounts, published today. Founded in 2011, BGF is a leading investor of growth capital in the UK and Ireland, with a mission to back small and mid-sized firms powering the future of the economy.

Key highlights:

  • Maintained BGF’s position as the most active investor in UK and Irish growth economy companies
  • Backed 67 new companies, investing a total of £600 million, up 55% year-on-year
  • Provided £165 million to 65 portfolio companies in the form of follow-on funding, a key part of the longer term offer to entrepreneurs, and a 35% increase versus 2020
  • Exited investments in 39 businesses, up 39% from 28 exits achieved in 2020
  • Sustained delivery of long-term objectives, namely building a large and diversified pool of small investments to a wide range of companies and sectors, to create a self-sustaining investment platform and driving value growth for shareholders in line with their founding objectives
  • Delivered a total return of £571 million from exits in 2021 (up from £233m in 2020), equivalent to an average 2x money multiple and a 23.4% gross internal rate of return
  • Grew overall NAV by £543m to £2.8bn largely through robust investment performance, based on a disciplined investment process delivering targeted deployment
  • Recycled nearly £2bn of proceeds from exits as at December 2021, with over £390m realised year to date in 2022
  • Capital deployment matched capital returned from realisations. BGF continued to increase investment run-rate, without drawing on committed shareholder capital since June 2021
  • Continued strengthening of the wider BGF team and platform to deliver a broad and positive impact for the portfolio, through investment, support and influence
  • Grew BGF team to 189 people, with 79 investment professionals and 16 portfolio specialists, across 16 offices
  • Appointed Roshni Bandesha as BGF’s first head of ESG and Sustainability to spearhead ESG initiatives across the firm and its portfolio
  • Established a clean growth advisory board led by Baroness Brown, chair of the Carbon Trust, to accelerate efforts to invest in companies supporting the energy transition
  • Expanded the BGF Talent Network, one of the largest pools of board-level non-executives in the UK and Ireland, to 6,500 members. The majority of the new contacts have been developed for BGF’s Expertise on Demand pools, with a continued focus on ensuring a balanced and diverse non-executive network, and increasingly developing international relationships

BGF invests from a permanent balance sheet as opposed to a series of fixed life funds more commonplace in the market. This unique investment model provides long-term support and minority investments to entrepreneurs underserved by other investors.

Stephen Welton, Executive Chairman, said:

“Put simply, 2021 was an extraordinary year in which a combination of hard work, a strong portfolio and a maturing regional investment model, together with the initial recovery of the economy post pandemic, helped us achieve record results. However, a key strength of BGF’s permanent capital approach is also its ability to invest through the cycle, which is especially important as we look ahead now.

“But this is not a case of job done, it is job begun as we continue to further evolve the BGF model to build a large, diversified portfolio of small investments across the Growth Economy. This is true to BGF’s objective of delivering good and sustainable long-term returns. Looking ahead, our mission is to continue to ensure that investment reaches every corner of the UK and Ireland, supporting entrepreneurs, innovation and key sectors that will drive the economy.

“Our commitment to good growth governs all aspects of our work, to ensure that BGF’s support is far-reaching, meaningful, long term and sustainable.”

Andy Gregory, Chief Investment Officer, said:

“Our strong exit record in 2021, combined with the significant increase in investment volumes, speaks to the continued performance of BGF’s investment model. Exits are a key measure of success and these results confirm that we are continuing to back even more great businesses than ever, providing valuable support to portfolio companies, and ultimately delivering strong returns when those businesses continue on their journeys.

“Each of our portfolios – growth, early stage and quoted – would, by themselves, be significant players in their respective markets. What makes our model powerful is that we integrate them into one, each part reinforcing the others. This collaboration shows how BGF can support entrepreneurs all the way from early-stage funding to public funding, backing our winners through every stage of growth.”

Financial performance

Key financial performance metrics 2021 2020
Investments £596m £384m
Divestment: Proceeds £533m £226m
Divestment: Realised Gains £137m £45m
Portfolio: Valuation Gains £269m £265m
Operating gain £404m £306m
Profit after tax £387m £304m

Read the full report here.