Partner Article

Capitalising on every growth opportunity: NEL Fund Managers

NEL Fund Managers
www.nel.co.uk 
LinkedIn: NEL Fund Managers

A key ingredient in any small and medium-sized business’ growth plan is access to finance. And for NEL Fund Managers’ chief executive Paul Scott, North East businesses have never been in a better position to attract investment as a bullish region shifts towards a brave new era of collaboration and coordinated growth. Here, Simon Rushworth speaks to the Team Valley-headquartered organisation’s boss to find out more.

When it comes to managing multi-million-pound funds and driving transformative investment, Paul Scott requires no introduction.

NEL Fund Managers’ chief executive cut his teeth closing major international deals in London’s financial heartland before going on to lead Bahrain’s expansive sovereign wealth fund investment activities.

An enviable reputation for delivering transformation and growth precedes him.

Nevertheless, Paul always imagined himself helping growing businesses much closer to home.

Ashington-born and fiercely proud of his North East roots, he frequently manifested a move back to where it all began.

Perhaps that’s why the passion pours forth as he maps out a robust future for ambitious regional businesses – with Team Valley-headquartered NEL Fund Managers acting as a laser-focused catalyst for progress.

He says: “I’m heavily invested in the idea of place-based impact and how that can be married with large-scale investor appetite.”

Paul’s experience gives him a rare vantage point: an intimate knowledge of how large institutional pools of capital think, what they need from fund managers and, crucially, what has historically held them back from deploying into regional opportunities.

He adds: “We’re seeing an influx of large-scale infrastructure projects across the North East right now, such as the recently-announced data centre in Northumberland, the airport expansion, port redevelopment, creation of investment zones and Teesworks’ regeneration, to name just a few.

“Executed in the right way, that brings an obvious economic multiplier effect across the foundational economy, as well as high-growth sectors.

“But if we’re really going to capitalise on that effect, embed regional growth and make our economy resilient, then we must support the supply chains into these big projects and provide opportunities for regional SMEs to participate.

“To really capture any long-term growth, we need to lay the groundwork for that place-based impact.

“We need to ensure the rewards linked to these big projects aren’t all going to international suppliers.

“And we need to put the North East’s SMEs in a position where they’re ready to capitalise on every opportunity by making sure they have the right finance and strategic support to participate and thrive.

“By doing all of this, we’re facilitating that place-based impact.

“We’re driving the regional economic growth that delivers high-quality jobs and long-term confidence.”

It feels like the stars have aligned for SMEs across the region seeking to scale at pace and prove their worth as key players in the wider economy.

Paul and NEL Fund Managers are perfectly positioned to source capital investment and offer expert guidance to SMEs.

“We can help businesses build infrastructure, so the wheels don’t come off when they scale”

At the same time, the North East is embracing a new era of collaboration and cooperation.

He says: “The emergence of the region’s combined authorities has been key.

“It has facilitated more relevant local and regional strategic growth plans, and proved that devolved powers can make a real difference.

“Tied to the growing influence of the combined authorities is a new era of cooperation – perhaps more so than I’ve seen in the past.

“It’s encouraging, for instance, to see North East mayor Kim McGuinness chairing The Great North and bringing the regions together to unlock jobs, opportunity and prosperity.

“The rationale is there to collaborate more closely and to work as one to drive investment and growth.

“The businesses we work with don’t stop at a county boundary or a political boundary.

“I’m seeing greater cooperation when it comes to helping those businesses thrive.”

Significantly, NEL’s support extends far beyond traditional investment.

Paul is justifiably proud of his firm’s ‘More Than Capital’ mantra – an approach that arms SMEs with the knowledge required to scale with confidence.

He says: “Our message is that, ‘we can invest in your business, but we can do so much more too’.

“We work with a range of sector specialists; we can tap into a network of experienced NEDs.

“We can help businesses build infrastructure, so the wheels don’t come off when they scale.

“On top of that, we’ve got contacts throughout the UK and internationally.

“We regularly run roundtables with portfolio companies because what we’re finding is that, almost irrespective of sector, a lot of the challenges facing businesses are the same.

“As an example, we host roundtables on digital transformation in artificial intelligence.

“From an entrepreneur’s perspective, we cut through the froth and look at the practical, day-to-day benefits and pitfalls.

“We ask, ‘how can you use artificial intelligence effectively without burning through a ton of cash or wasting a lot of time?’

“It’s another way for SMEs to drive productivity.”

In circling back to the idea of place-based impact, Paul concedes institutional investors have traditionally shied away from investing in the regions and the clusters of smaller businesses pivotal to sustainable growth in part due to the perception of risk and the smaller allocation size when their portfolios run into tens of billions.

However, he argues SMEs are an increasingly attractive asset class.

Paul says: “It’s a good place for capital to be deployed.

“Done in the right way, it can drive innovation, job creation, place-based impact and deliver attractive investor returns.

“Investor appetite now appears to be there, however, LGPS pooling is absorbing a lot of bandwidth.

“What investors need is a credible partner, embedded in that ecosystem, with relationships, regional intelligence and the proven ability to deploy.

“That’s what we’ve been able to demonstrate, time and time again.”

So what does the future hold for Paul and the NEL team?

He says: “We’ve invested ahead of plan into some fantastic businesses, and the portfolio is in great shape; as a result, we’ve just been allocated an extra £21.5 million to invest, which doubles the fund size targeting that segment of the market.

“You’ve got to demonstrate you can invest at the right rate in high-quality businesses and have a good portfolio return.

“We’ve demonstrated both.

“It helps validate our absolute belief that there are investable opportunities right across our region.

“If managed effectively, it can deliver transformational regional growth that is sustainable, build high-performing portfolios for investors at scale and build resilience into the financial ecosystem through supporting regionally headquartered players like NEL.

“I want NEL to not just participate in what comes next, but help define it.”

For more information about NEL Fund Managers and the support it provides, visit the website at the top of this article.

This was posted in Bdaily's Members' News section by N Magazine .