Since 2015, Investment Fund Groningen (IFG) has been firmly committed to increasing the innovative power and strengthening the structure of the Groningen economy. IFG does this by participating in investment funds that want to invest their capital (also) invest in regional SMEs. A success, to be sure. For example, with Berk Partners Growth Fund in 2018 and recently with Borski Fund, two nice funds were added to the portfolio.
IFG is an initiative of the province of Groningen and is implemented by NOM. 'Our goal is to recoup investments, preferably with a plus,' says fund manager Jan Martin Timmer. 'The proceeds are used again for new investments. 'IFG partly invests in market funds and on the other hand it initiates funds itself, often with a higher risk profile.
The main focus is on the impact on the region. 'Besides a good financial return, social return is at least as important,' emphasizes Jan Martin. 'In the latter case, you have to think of return in the form of jobs and strengthening of the Groningen economic structure. Cooperation with market funds is crucial for this. That is why I am so pleased with the participations in Berk Partners Groeifonds and Borski Fund. Two funds that can be of great added value to the region.
Willem Kamps | Berk Partners Growth Fund 'We can strengthen each other considerably'
Berk Partners Growth Fund is the fifth investment fund of Berk Partners, an investment company founded in 1992 by businessman Ben Pon, who died last year. We asked Willem Kamps, one of the fund managers, about the background of the fund and, of course, the how and why of the partnership with IFG.
'With Berk Partners Growth Fund, we want to further emphasize our ambition to support companies and management teams in their growth ambitions,' says Willem. 'With a size of €50 million, this is the largest fund in Berk Partners' history.'
What does your investment strategy look like? Where is the focus?
'Like all previous Berk Partners funds, we focus on long-established and successful Dutch SMEs. With the difference that, based on previous experience, we are now focusing on three preferred sectors: the innovative manufacturing industry, the food industry and healthcare suppliers.'
How did the contacts with IFG come about?
'My fellow fund manager Rimco Geels knew Jan Martin Timmer from the past. After we started Berk Partners Growth Fund, he asked him if IFG was interested in participating. We were keen to have a party like IFG, and thus NOM as executor of the fund, on board. Especially also because our preferred sectors are well represented in the province of Groningen. This ultimately resulted in IFG taking an interest in the fund.'
What can you do for each other?
'I am convinced that we can strengthen each other considerably. For example, we are active in sectors in which IFG has not yet developed any or hardly any activities. In addition, we focus emphatically on companies in the mature phase, while IFG's focus is on early-stage investments.'
What can we expect from the collaboration?
'Private equity firms such as Berk Partners fulfill an important social role. By providing growth capital to companies in, for example, the province of Groningen, a contribution is made to the economy and employment. After all, situations in which private equity firms play a role, such as business succession, acquisition by management from within or outside the company, or the funding of autonomous and acquisitive growth, cannot usually be realized exclusively with (bank) loans due to the risk profile. As a result, business activity and entrepreneurship in the province of Groningen is preserved, strengthened and facilitated in its further growth.
Simone Brummelhuis | Borski Fund 'We are a thorough investor'
Borski Fund is the first Dutch venture capital fund focused on fostering female entrepreneurship. Why is that so important? And to what extent can the collaboration with IFG help with that? Co-founder Simone Brummelhuis explains.
'Borski Fund, which I co-founded with Laura Rooseboom, launched in 2019,' Simone explains. 'We are an investment fund that provides venture capital to young promising companies led by women entrepreneurs or mixed teams. Laura and I have been working for some time to help these companies move forward. Myself with The Next Women, a network for women entrepreneurs and Laura, among others, with StartGreen Capital, the country's largest fund manager in sustainability. It was a logical step for us to do the same now with an even bigger fund.
Why a focus on women entrepreneurs?
'More and more innovations are being conceived and developed by and for women. To make them successful, funding is obviously needed. The problem, however, is that there is hardly any investment in women entrepreneurs. The figures are telling. For example, research shows that only five percent of venture capital ends up in mixed teams and only one percent in companies founded by women. With Borski Fund, we want to change that. Because we believe in equality and fair opportunities, but also because experience shows that mixed teams are more innovative and perform better. Moreover, women usually launch different innovations than men, such as femtech and fashiontech.'
Why the collaboration with IFG?
'We had already raised a lot of private capital from the market, but felt that Regional Development Companies, such as NOM, should also participate. That's why we contacted IFG. After all, we see many talented women entrepreneurs coming out of Groningen. The city of Groningen also has excellent knowledge institutions, many ambitious foreign students and proven expertise in a variety of fields. This is exactly what startups and scale-ups need. And so we would like to have a presence in the region.'
What can you do for each other?
'Together with IFG we want to ensure that even more women entrepreneurs come to the North and stay in the region to make innovations a success. This requires more than just money. They are also looking for a broad network to help their business grow faster. And that is what we offer. We are also a thorough investor. That means we really take the time to see how we can best help entrepreneurs and companies on their growth path. Meanwhile, that has already resulted in a first Groningen investment. Together with other Groningen investment partners, we will support Zielwear in their growth ambitions in the coming years.
When is cooperation successful?
'It is important that we continue to refer companies to each other. Both in quality and in quantity. So you must constantly consult with each other and see where opportunities exist in Groningen. Think together about the development of innovations and how you can commercialize them. And then release capital for this and try to involve other investors as well. Ultimately, it is an ecosystem that you have to build. We have now taken the first step towards that.
In this white paper you will learn:
- What you have to deal with when you start working with investors
- Differences and similarities between bank funding, subordinated loan and equity capital
- In what ways NOM as an investor can help you
Please note that this whitepaper is only available in Dutch at the moment. We are in the process of translating this whitepaper.