The British Business Bank has pledged £40 million to Frontier Development Capital’s (FDC) new £81.5 million Evolution Fund. This bold investment aims to unlock growth for smaller businesses in the Midlands and North of England, regions that often receive less national funding support. By partnering with FDC, the British Business Bank is taking a strategic step toward balancing regional finance disparities and supporting economic growth beyond London and the South East.
Unlocking Growth and Sustainability for Regional SMEs
Co-backed by an additional £40 million from the West Midlands Pension Fund (WMPF), the Evolution Fund is designed to offer flexible debt financing ranging from £1 million to £8 million. It targets well-established smaller businesses with proven management teams and strong growth potential. Sector-agnostic by design, the fund supports a wide array of strategic uses including management buyouts, acquisitions, shareholder reorganisations, and debt refinancing.
What sets the Evolution Fund apart is its commitment to sustainability. A portion of the capital is dedicated to helping businesses adopt greener practices and work towards net zero carbon emissions. This aligns with the UK’s wider environmental goals, ensuring that regional growth also supports climate targets.
Since its launch in 2016 in Birmingham, FDC has invested over £200 million in regional businesses. Their expertise in working with SMEs outside London and the South East positions them as a vital partner in tackling geographic inequality in access to finance. This is the second collaboration between FDC and the British Business Bank, reflecting a shared vision of inclusive, sustainable economic development.
Strengthening UK SMEs with Leadership and Strategic Investments
The British Business Bank, established in 2014, serves as the UK Government’s economic development bank. Its mission is to promote sustainable growth by improving finance access for smaller businesses. Over the years, it has supported nearly 64,000 businesses with £17.4 billion in finance, including critical pandemic-era support through government loan schemes.
To navigate future financial risks and complex investment programs like the Evolution Fund, the Bank recently appointed Joanna Wright as Interim Chief Risk Officer starting May 2025. Wright brings three decades of experience from major financial institutions including Santander UK and Visa Europe, enhancing the Bank’s enterprise risk management.
Beyond the Evolution Fund, the British Business Bank’s portfolio spans early-stage venture capital funds, regional development initiatives, and scale-up accelerators. Their investments in the Northern Powerhouse Investment Fund and Midlands Engine Investment Fund have directly supported thousands of SMEs and startups. Through its subsidiary British Business Investments Ltd, the Bank promotes private sector involvement to diversify and expand the availability of finance for UK businesses.
This £40 million commitment to the Evolution Fund is more than just capital—it signals a strategic focus on regional empowerment, sustainability, and tailored funding solutions for SMEs. As Adam Kelly, Managing Director at the British Business Bank, noted, supporting experienced managers like FDC helps improve access to finance across the UK’s nations and regions.
Graham Mold, Head of Growth Capital at FDC, emphasized the need for flexible, tailored debt funding for smaller firms often underserved by traditional lenders. Meanwhile, Shiventa Sivanesan of the West Midlands Pension Fund highlighted their commitment to responsible investment and hopes other investors will follow suit.
In today’s complex economic landscape, the Evolution Fund could be a crucial driver of regional prosperity, helping SMEs grow sustainably and thrive amid ongoing challenges.
