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British Business Bank commits £40m to Frontier Development Capital’s Evolution Fund

Press release 22 May 2025

The British Business Bank has committed £40m to Frontier Development Capital’s (FDC) new £81.5m Evolution Fund to support the growth of smaller businesses in the Midlands and the North of England. The fund is also backed by a £40m commitment from West Midlands Pension Fund (WMPF).

The Evolution fund, which will focus in particular on businesses in the Midlands and the North of England, will provide flexible debt solutions of £1m to £8m to established smaller businesses in any sector with proven business performance, growth potential and a strong management team.

The funding can be used to support transactions including management buyouts, acquisitions, shareholder reorganisations and debt refinancing, provide growth capital or help firms to embed sustainability practices and work towards achieving carbon net zero.

FDC, which is based in Birmingham with offices across the UK, has a strong track record for supporting regional smaller businesses, having invested over £200m since its inception in 2016. The Evolution Fund is the second FDC fund to be backed by the British Business Bank.

Adam Kelly, Managing Director and Co-Head of Funds, British Business Bank, said: 

We are pleased to continue our support for FDC, having previously backed the FDC Debt Fund in 2020. The British Business Bank is committed to increasing the supply and diversity of finance for smaller businesses. By backing experienced fund managers like FDC, we help improve access to finance for ambitious companies across the UK’s Nations and regions.

Graham Mold, Head of Growth Capital of Frontier Development Capital, added: 

Despite the variety of debt providers in the market, it is still difficult for smaller firms to secure capital as many funders are unwilling to lend sums of under £10m or to support transactions involving SMEs. The Evolution Fund reinforces FDC’s commitment to regional businesses often underserved by traditional lenders. As no two deals are the same, it is also designed to meet the need for tailored SME funding. Our team’s ability to assess risk, structure investments and support resilient businesses makes FDC a valued funding partner.

Shiventa Sivanesan, Assistant Director – Investment Management and Stewardship at the West Midlands Pension Fund, said: 

We’re excited to build on our existing partnership with FDC and British Business Bank as part of our long-term commitment to support regional SMEs. Our investment is expected to deliver competitive returns aligned with our responsible investment values, allowing us to serve the interests of our members. Businesses are operating in an uncertain and challenging environment and by improving their access to funding we can enable them to grow and fulfil their potential. We hope other investors will follow our lead and help to scale up the support SMEs need to grow and thrive.

Further Information

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Notes to editors

About the British Business Bank

The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to drive sustainable growth and prosperity across the UK and to enable the transition to a net zero economy, by improving access to finance for smaller businesses. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.

The British Business Bank’s core programmes support over £17.4bn 1 of finance to almost 64,000 2  smaller businesses.

As well as increasing the supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of finance options available to smaller businesses. The British Business Bank Finance Hub provides independent and impartial information to businesses about finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success.

The British Business Bank is also responsible for administering the government’s three Coronavirus loan schemes and its Future Fund, together responsible for delivering £80.4bn in finance to 1.67m businesses. These schemes are now closed to new applications.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. With the exception of BBB Investment Services Limited they are not authorised or regulated by the Prudential Regulation Authority or the Financial Conduct Authority. BBB Investment Services Limited is authorised and regulated by the Financial Conduct Authority. A complete legal structure chart for the group can be found at British Business Bank.

The Investment Programme is operated by British Business Investments Ltd, a wholly owned commercial subsidiary of British Business Bank plc. British Business Investments Ltd is registered in England and Wales with company number 09091930, and registered office at Steel City House, West Street, Sheffield, S1 2GQ.

The transaction described above does not constitute or imply any endorsement, warranty or recommendation by the UK government, British Business Bank plc or its subsidiaries or any other party in respect of Frontier Development Capital or its products or services.

About the West Midlands Pension Fund

The West Midlands Pension Fund provides Local Government Pension Scheme services to over 340,000 members and more than 800 employers across the West Midlands region. It is the second largest LGPS Fund in England and Wales with over £21 billion of assets. Over £7.6 billion of these are invested in the UK in a wide range of assets including infrastructure projects, private equity and property. 3

Employers include the seven Local Authorities: Birmingham City Council, Coventry City Council, Dudley Metropolitan Borough Council, Sandwell Metropolitan Borough Council, Solihull Metropolitan Borough Council, Walsall Council and the City of Wolverhampton Council (who are also the Administering Authority), together with the West Midlands Combined Authority for the seven Constituent Authorities.

The Fund was recognised for its strong governance and investment strategy achieving awards in both categories in the Local Authority Pension Fund Investment Awards 2024. In 2023 the Fund won the Investment Innovation Award for its collaboration with the West Midlands Combined Authority to support growth and innovation among new companies and technologies within the region via the new West Midlands Co-Investment Fund.

The Fund has achieved signatory status to the UK Stewardship Code (2020) for the last four years, and has attained accreditations for Pension Administration from PASA, holds Investors in People (GOLD), Customer service excellence and annually undertakes independent benchmarking to inform continuous improvement.

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