Andy Gregory reflects on 2023, another year of positive progress

As we begin a new year, I want to reflect on 2023, my first full year as CEO, and celebrate several achievements from across BGF and our portfolio companies.

First off, there’s no escaping the fact that the UK economic environment remained stubbornly challenging last year, with GDP growth almost non-existent and businesses facing higher cost pressures and continuing uncertainty. It’s that backdrop that makes positive progress and accomplishments last year even more notable.

We backed 44 new businesses last year from a diverse range of sectors across the UK and Ireland, investing over £430 million in companies including Brompton Bicycle (London), Troy (SW), Recite Me (NE), Kooth plc (London), Socitm Advisory (Central & East), Purple (NW) and Ocean Crest Marine (Republic of Ireland).

We also invested more in businesses tackling critical issues such as climate change (Artus, Gaussion, Nuada) and life sciences (ViaNautis, Entia, Cyted). It takes our total investment in growth companies to £3.9 billion since BGF was founded across 567 companies in the UK and Ireland.

Our overall exit activity in 2023, which stands at 34 exits returning almost £300m of capital, was slightly lower than our three-year average, reflecting a combination of the market backdrop and the 2022 comparison being a record for the number of exits we achieved.

Nevertheless, we achieved some of our most successful exits last year with notable transactions including the sale of Amdaris (South West), RiverRidge (Northern Ireland) and STATS Group (Scotland). Last year’s exit activity takes our three-year average money multiple to 1.81 X and our IRR to 19%, with total three-year returns now exceeding £1.5 billion.

As we begin 2024, many of the economic challenges from last year remain, with political uncertainty also rising.

In these more challenging times, our patient approach to investment, minority partnerships and breadth of our expertise on offer to portfolio companies matters. It’s what sets us apart from more traditional private equity or venture capital funders and it’s why we are seeing an increasing demand from ambitious growth companies.

Looking at our own business, I am delighted that we have stayed true to our purpose, which has driven so much of what we do and how we do it.

I was delighted that we could close out last year by achieving certified B Corp status, recognising our long-standing commitment to creating a positive impact within and beyond our organisation.

BGF has always had a strong commitment to equity, diversity, and inclusion. We were named the most active institutional investor in women-led businesses by the Scale-Up Institute for the fourth year running and we continued to bring female entrepreneurs together to share their experiences and build their networks, through our regular ‘Scaling up and standing out’ series of events at BGF offices across the UK and Ireland.

In our own recruitment efforts, 70% of new joiners last year were either female and/or from Black, Asian, or minority ethnic backgrounds. Finally, a new development for 2023 was the launch of our graduate programme, which saw an ambitious cohort of seven graduates join BGF teams across the UK and Ireland, helping to shape the future of the investment industry.

Looking ahead, I am excited for BGF this year and the opportunity for us to make a positive impact across our portfolio. We will continue to back great companies, providing minority, long-term and patient capital to a diverse range of growth businesses and providing ongoing funding and strategic support so that they can maximise their potential.

I look forward to updating on our progress later in the year.

Andy Gregory

CEO

16 January 2024