BGF – the UK and Ireland’s most active growth capital investor – has reported record-breaking results and surging growth in its 2020 Annual Report and Accounts, published today.
Despite the Covid-19 pandemic, BGF actively maintained its risk appetite to keep supporting the economy and backed 61 companies in 2020, investing a total of £384 million during the year. This represented an 11 per cent increase on the previous year, and in the first quarter of 2021 an increase of over 100 per cent on the same quarter in 2020. In total for 2020, £262 million went into new companies across a range of sectors, including life sciences, e-commerce and IT services, while a further £122 million of follow-on funding was deployed to existing portfolio businesses. 2020 was also an equally good year for exits with BGF delivering 28 exits that generated returns of £228 million.
BGF demonstrated a robust performance with a substantial increase in net assets to £2.3 billion (2019 £1.8 billion). The Group made a year-end operating profit of £346 million reflecting ongoing growth in its underlying portfolio and realisations.
Stephen Welton, executive chairman, said: “We’ve gone through what we hope will be a once in- a-generation event, and learned that with determination, focus and the right allocation of capital, we can achieve amazing things. BGF’s excellent performance during the pandemic demonstrates the strength of our diversified model, our strong regional approach and the resilience of the entrepreneurs we exist to support. We’re proud that our model stood up under pressure, allowing us to continue investing at an average pace of one new investment a week, despite the upheaval of lockdowns and other challenges. No other equity investor in the land can match that rate of activity. We have a unique investment platform and capability that we want to continue to leverage in full as the economy both recovers and powers ahead in key sectors.”
Andy Gregory, chief investment officer, said: “Because we take a long-term approach to investing, we were able to see past the short-term challenges affecting some of the sectors most impacted by Covid-19, which enabled BGF to continue to deploy capital at a time when it was most needed. All in all, our investment model has proved remarkably effective during the pandemic. I’m confident that our key metrics will only increase in the year ahead
Since its launch in 2011, BGF has now deployed over £2.5 billion worth of capital and backed more than 400 companies. In 2020, BGF invested in a wide range of companies including earlier-stage businesses, growth-stage businesses and quoted companies across multiple sectors and every region of the UK and Irish economies. E-commerce, technology, life sciences, health and education businesses were standout performers, with continued positive growth across the portfolio. BGF also saw a rise in successful exits across investee businesses due to the availability of private equity capital.
BGF is the one of the most active investors in the life sciences sector. To date, it has backed more than 30 life science businesses, with its current portfolio spanning diagnostics, medtech and digital health, as well as services, software and tools supporting therapeutic development. Life sciences and the focus on R&D in areas such as pathology, biotechnology and drug discovery, has come front and centre during the pandemic. The industry has proven it plays a major role in the delivery of healthcare, and in particular driving forward innovation that has defined the UK’s response to Covid-19. That experience has generated significant activity in the healthcare sector and in life sciences, in which BGF is now a leading sector specialist, and will continue to be a primary focus in 2021.
BGF aims to significantly boost its investments in the field of ‘green growth’, from fuel cells to energy-efficient buildings. It has already backed more than 20 companies in this arena and is now establishing a high-powered Advisory Board to ensure the key issues and steps to deliver net zero are core to BGF’s investment strategy. There is set to be a huge amount of investment and innovation in this area and BGF is committed to making a meaningful contribution.