Fund Support North 'Time ripe for more active marketing'

It is now three years since NOM deliberately chose to officially split off third-party fund management into a separate branch of the organization. Now the time seems ripe for Fonds Support Noord (FSN) to take the next step: becoming more visible and active in the market. As an enthusiastic fund manager, Rob observes that FSN can be much more meaningful to the North of the Netherlands, but is also aware of the dilemmas this may raise ...

Again, why was FSN founded?

'For healthy economic development, it is important that the resources available from regional investment funds easily find their way to SMEs. We saw that some public bodies or idealistic organizations have money to invest, but lack the expertise themselves or the connection to SMEs. Instead of them investing time, money and effort themselves to set up those processes and networks, it seemed smarter to us to make NOM's knowledge and experience available through FSN.'

What do you offer?

'Our fund management includes full services: from investment management, legal support and administrative tasks to reporting and control. For parties that prefer to acquire themselves, only administrative fund management is also possible. Then they can focus on investment decisions and leave matters such as contract formation, accounting and accountability to our expertise.'

What funds are already hooked up?

'FOM, MKB Fonds Drenthe and Investeringsfonds Groningen had been using NOM's services for some time. By establishing FSN, we made an official cut and now we also do fund management for the GROEIfonds of the Economic Board Groningen and for G-Force Capital. In recent years at FSN we have mainly built on a good internal organization. That is running fine and we are even considering expanding, because we see more opportunities.'

What do you think about, what opportunities are there?

'The breeding ground for entrepreneurship is better than ever. It is brewing and bubbling in many places in the region, partly due to education and zeitgeist of transition. Ideas and groups with potential for new business activity are emerging in all sorts of places. These movements are sometimes hard to detect, but they are present. With appropriate funds, you can boost these kinds of initiatives in the region. In turn, FSN can help get these young funds off the ground, so that the practical complexities of fund management do not act as a brake.

Why new funds in addition to what is already there?

'The closer you are to the business, the more focused and successful you can invest. The existing funds each have their own frameworks and goals, which means that some initiatives fall by the wayside. This gives room to new funds, which allows investment funds to find their way better. A good example is G-Force Capital, which was established through the Investment Fund Groningen with a specific focus on the IT hub in Groningen. There are plenty of creative and entrepreneurial minds there, with just as many ideas. This raises the question of how to join forces and provide a financial stimulus. Those signals have been picked up and translated into G-Force Capital.'

And G-Force Capital then knocked on FSN's door ...

'Fund manager Marco de Jong is a man who is excellent at doing the acquisitions himself, but he wants to focus on investment management and prefers to outsource the back end. So we pick up that bookkeeping and, where necessary, think along in contract negotiations. This is one of FSN's great added values, because for smaller funds in particular it is not feasible to have all the specialist knowledge in-house.'

How does FSN deal with wearing multiple hats?

'Strict separation between the funds is paramount, including our own NOM funds. Just as banks or accountants serve clients in the same sector with integrity, so do we. Sometimes certain funds work together on an investment, each from its own motives and goals. Because each fund has its own focal points, the outcomes of applications may differ. If we also take care of the investment side, we can always argue from the fund in question how we proceed.'

Also, is integrity verifiable?

'Each fund has its own governance, its own shareholders and its own investment committee. That makes the divisions between funds we manage as FSN clearer. It is not that only we at NOM say we are doing well; they - the funds we manage - say so too.'

How will FSN raise its profile, if you want to grow?

'That is the challenge, because there are plenty of opportunities, but we do have a specific task as NOM. Private parties investing for profit are not eligible for support from FSN. We are only available for fund initiatives with a Northern Netherlands focus, such as government-related organizations or parties with a (partly) idealistic objective that serve the public interest of the northern provinces.'

But FSN has the expertise to serve other funds as well ...

'Indeed. Funds that can also be of significance for the economic climate in the northern Netherlands. There is an area of tension between what suits NOM and what does not. It is clear that we will not manage full-fledged private commercial funds, but with certain funds we can bring more élan and money into the northern provinces. The more investments, the harder the flywheel works and we as NOM certainly have a role to play in that.

And those dilemmas?

'We must take a critical look at our role: to what extent can we from NOM occupy a place in the market without disrupting it? But also: are we going to use a revenue model? There is no profit motive, but our organization also costs money. Furthermore, we are thinking about the point at which we will withdraw as FSN if young funds become successful and can stand on their own two feet.'

Serious plans, then?

Yes, because we see opportunities for the Northern Netherlands. We want to prevent creative hotbeds from leaving for elsewhere by encouraging initiatives here in the region as much as possible. Support for young funds can certainly contribute to an optimal investment climate and thus to development opportunities for innovation and new business.'

Want to know more about FSN?