Venture capital firm Edge Investments has set up a £40 million fund targeting the creative industries.
Theatre companies will be able to apply to the fund for investment on commercial terms. The fund is seeking a minimum three times return over its seven to 10-year life for its investors, who are a mixture of businesses and high net worth individuals. The government-owned British Business Bank is also committing £24 million to the scheme. It marks the first time the British Business Bank has backed a scheme focussing on the creative industries.
The Edge Creative Enterprise Fund will look to invest in “fast-growing and revenue-generating small and medium-sized creative companies, which have access to core intellectual property assets which Edge believes are poised to benefit greatly from the growing digital economy, and which can be scaled.”
Full details of how the fund will be allocated have yet to be confirmed. However, Edge said the key aspect that links all of the businesses would be the “creation, acquisition, management and commercial exploitation of intellectual property”.
Edge Investments chief executive David Glick said that the fund would bring “much-needed growth capital to the wider UK economy”.
He added: “There are nearly 160,000 creative industries businesses in Britain. Yet despite being in this high-growth sector, many of them find it difficult to attract adequate capital to maximise their potential. Our new Edge Creative Enterprise Fund aims to fill that funding gap.”
The fund’s launch comes as the Creative Industries Federation publishes a new guide aimed at helping arts companies source funding and investment, amid concerns about the ongoing financial pressures facing the sector.
The Creative Industries Federation’s new guide to sourcing funding and investment in the arts features contributions from more than 90 people across the arts and finance. It includes information on public investment, philanthropic support and private capital investment like the Edge fund.
It highlights that every pound of public funding in national portfolio organisations generates £5 in tax contributions from the sector, and states that philanthropic funding and private investment should not be substitutes for state support, but work alongside it.
National Theatre executive director Lisa Burger said the guide gives a “thorough overview of the wide range of options available to creative organisations… who seek to review, diversify or expand their funding streams”.
She added that it was “particularly timely given the ongoing pressure on public investment in the arts”.
On November 25, chancellor George Osborne will publish the government’s spending review, with government departments including the Department for Culture, Media and Sport being told to prepare for cuts of either 25% or 40%.
Creative Industries Federation chief executive John Kampfner described the publication as an “enormously practical how-to guide that will be of huge service in identifying all possible sources of funding in these challenging times”.
The guide has been devised and co-authored by Shaun Beaney from the Institute of Chartered Accountants in England and Wales.
ICAEW chief executive Michael Izza said: “The creative industries sector needs a way of combining public, philanthropic and private investment even more effectively if it is going to continue to thrive.”