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In this episode of City AM’s Boardroom Uncovered podcast, host Jon Robinson sits down with Andy Gregory, CEO of BGF, to explore the challenges and opportunities facing Britain’s growth-stage businesses.
Gregory shares candid insights from BGF’s nationwide portfolio, revealing why many CEOs feel the government isn’t doing enough to support ambitious, scaling firms.
From tax pressures to regulatory uncertainty, he outlines the headwinds shaping investment decisions across the country.
The conversation also highlights the resilience of UK entrepreneurs and the billions BGF has deployed to help regional businesses innovate, expand, and thrive.
#economics #uk #news #politics #business
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0:00
Do you think that this current
0:01
government is doing enough to support
0:03
the businesses that you invest in?
0:05
The government certainly does not appear
0:07
to be doing enough, maybe it's a partly
0:10
a British thing. I think success is is
0:12
viewed not as positively as it is it
0:15
certainly might be at all.
0:16
Has Brexit been so far a positive or a
0:19
negative for Britain?
0:20
I think it is difficult. I think is
0:22
obviously there are so many issues just
0:23
now for them to try and deal with and
0:25
people have either, you know, slowed
0:26
down growth plans, maybe even lost some
0:29
people along the way because they just
0:30
have had to. I'm a business owner,
0:32
business founder. How do I attract
0:34
capital from BGF? I would encourage
0:37
anyone who's thinking about taking
0:38
investment from any institution.
0:40
Frankly, that's a hugely important part
0:42
of the process is to get to know because
0:44
once you're in, you're in. Clear growth
0:46
plan, ambition, focus, clarity, open to
0:51
influence. Hello and welcome to another
0:53
edition of City AM's Boredom Uncovered
0:54
with me, John Robinson. My guest for
0:57
this episode is Andy Gregory, the CEO of
0:59
BGF. Set up in 2011 by a clutch of high
1:02
street banks, BGF has invested almost5
1:05
billion pounds in around 600 businesses
1:07
across the UK with a particular focus on
1:10
those outside London and the Southeast.
1:13
So what part can BGF play in getting
1:15
Britain back to growth? Or are this
1:17
government's policies holding them back?
1:19
Without any further delay, let's dive
1:21
in. Well, Andy, thank you very much for
1:22
coming on board uncovered. It's great to
1:24
have you here.
1:24
No, likewise. Good to be here. Thank
1:26
Best place to start I think is can you
1:28
give me a quick 30 seconds on what BGF
1:31
is?
1:31
So BGF founded back in 2011 fill a gap
1:34
in the funding landscape and basically
1:36
providing growth equity capital tomemes
1:39
to help them grow regionally focused so
1:42
right across UK and Ireland across many
1:44
different sectors. We don't take control
1:46
of businesses take a minority stake and
1:48
not just capital we also have a lot of
1:50
resource and helps those businesses grow
1:52
as well.
1:52
And you've been there since the start.
1:54
Looking back over that time, would you
1:55
consider an organization like BGF to be
1:58
a success? Have you achieved your aims?
2:01
I think we have. And again, I'm punch
2:02
have a rose tinted view on a
2:04
little bit biased maybe. Little bit. I
2:06
think if you were to ask our
2:08
shareholders really more importantly the
2:09
question. I think they would agree with
2:10
that. It has taken time I think to do
2:13
anything. We were established to fill a
2:16
gap. And I guess the gap was there
2:18
because a lot of people who were
2:20
providing capital right across the
2:22
country with relatively small checks um
2:26
all moved up scale because the economics
2:28
take you there. So to try and do
2:31
something really at scale right across
2:33
the country doing it at volume that
2:35
perhaps we'll come on to
2:37
is not easy. So we've had lots and lots
2:40
of learnings and evolution along the way
2:42
and we've deployed now about 4.7 billion
2:46
over that period. So lots of activity
2:48
backing about 620 companies.
2:51
And what's been really important and I
2:54
guess why I would positively say it's
2:56
been a success is obviously in our world
2:59
you can only really measure success once
3:01
an investment has been realized. So
3:04
we're 14 years in. What the last few
3:06
years have shown thankfully is that
3:08
we've seen about 240 exits or so over
3:11
that period and those returns coming
3:13
through right across those exits have
3:15
been very good. So we're very happy that
3:16
it's working as a model.
3:18
Record profits in 2024 as well because
3:20
of those exits as well. I suppose that
3:22
speaks to that.
3:23
Yes, I think we are now we're very much
3:25
self-sufficient. Our shareholders were
3:27
owned by the four main UK high street
3:29
banks predominantly. They've been very
3:31
supportive. We have a three billion
3:32
balance sheet. So you know real scale uh
3:35
which we can invest and recycle capital
3:37
from but I think back to your point you
3:40
know profitable cash generative paying
3:42
some dividends to shareholders it's in a
3:45
good place
3:45
BGF you know used to be called business
3:48
growth fund that growth element do you
3:51
think that you have actively contributed
3:54
to the growth of the UK economy through
3:56
your investments
3:57
we do and we're very very focused on
3:59
that and and when we were first set up
4:02
when there was specul population
4:03
probably inevitably that we would
4:06
gradually do what everyone else has done
4:08
and perhaps move away from that bit of
4:09
the market and move more move to you
4:11
know buyouts you know buying businesses
4:13
effectively doing larger checks moving
4:16
away from that theme uh end of the
4:18
market and we have absolutely not done
4:20
that
4:21
so that has been really important for us
4:24
and basically by backing good businesses
4:27
that grow and do well the positive
4:30
impacts coming from that which I'm sure
4:32
we'll come to our very material. So even
4:36
just a cohort of our portfolio that I
4:38
referred to earlier, we'd have seen
4:40
about 7 billion of of revenue growth,
4:43
you know, a billion of additional
4:45
exports. I think it's about 27,000
4:47
additional jobs being created. So just
4:49
inevitably, you know, backing these
4:51
exciting entrepreneurial businesses,
4:54
they do well, the economy benefits
4:56
hugely from that. If I was being a
4:58
typical journalist, of course, a cynical
5:00
journalist, I would say, well, you're
5:02
investing into the companies, you're
5:04
taking out returns, and that's going to
5:05
your ultimate shareholders. How are the
5:07
b the companies that you're actually
5:09
invested in benefiting from BGF being a
5:11
shareholder? Well, just for your first
5:13
point, I can't I can't on behalf of my
5:15
shareholders, I would I would slightly
5:17
rebut that point in so far as
5:20
they they committed 2.5 billion on day
5:23
one. So, I mean, a huge sum of money.
5:25
We've not actually drawn all of that
5:26
down. Didn't we didn't have to as we
5:28
became more successful in recycling the
5:30
capital. So back to the point we have
5:32
paid some dividends. They have been
5:33
quite modest. So we basically hence
5:35
being able to recycle the capital and
5:37
actually back business with 4.7 billion
5:40
of capital over that period. So I think
5:42
I think credit to the shareholders for
5:44
providing that evergreen balance sheet
5:46
that we can invest from.
5:48
In terms of how we support the the
5:50
companies that we back. So a large bit
5:52
of it, a large part of it is the capital
5:54
itself.
5:55
Most of what we do we call growth and
5:58
these would be established businesses.
5:59
So profitable or or very very close to
6:02
being profitable typically firsttime
6:04
founder or a family business or a bit of
6:06
both. And typically they will have
6:08
choices. They are good businesses. They
6:10
don't really need to do anything. And
6:13
part of us being created is to try and
6:14
almost stimulate demand in the
6:16
marketplace. So they might do nothing.
6:18
Quite often our biggest competition is
6:20
they actually choose the new nothing and
6:21
just carrying on growing at a much more
6:23
modest pace perhaps. Maybe it's a small
6:25
debt raise or or private equity or a
6:27
trade sale. So the opportunity for us
6:30
with that balance sheet and the scale
6:32
that we have and the resources we have
6:34
is to
6:36
make entrepreneurs aware there's a
6:38
different path they can go down and by
6:40
that I mean they can retain control. So
6:43
it's really really important and it's
6:45
lots still lots of nervousness among
6:47
entrepreneurs about losing control of
6:48
their business understandably if they
6:50
put you know all that emotional energy
6:52
it's their baby very thoughtful about
6:55
bringing an institution into their um
6:58
shareholding base so we need to be very
7:00
good at that and then why would they
7:03
take capital from us so I guess
7:05
answering it from I guess perhaps their
7:06
perspective I think they would say we
7:09
can then really accelerate and support
7:11
their growth so The capital can support
7:14
and accelerate that growth. We can
7:16
strengthen the balance sheet. They can
7:18
use that capital. But much much more
7:20
than that are the resources that we can
7:22
provide alongside that in terms of how
7:24
they can build their strategy, how they
7:26
can build their their team executive,
7:28
non-executive,
7:30
how we can help them digital um wise in
7:34
terms of their IP strategy with their
7:36
export strategy is much much more than
7:39
just the capital. M
7:40
so I think and our our greatest and
7:42
frankly most credible advocates are the
7:45
entrepreneurs that we have backed over
7:47
the years.
7:48
Now in in my world in business
7:49
journalism there's an awful lot made of
7:52
successful exits four times multiples of
7:55
the investments. All of this is a real
7:58
success. You get the press release and
7:59
you see the coverage and all the rest of
8:00
it. Obviously nothing is talked about
8:03
for those investments that don't go
8:05
well. But all of those hundreds of
8:06
companies that BGF has invested in over
8:08
time, you're going to have some bad ones
8:10
there. What do you take from those
8:12
examples that you can learn from? A huge
8:15
amount. So we touched on it earlier over
8:17
the last 14 years, you know, we've
8:18
evolved a lot. We've learned an awful
8:21
lot along the way. And critically
8:23
importantly, we are still we are still
8:25
absolutely learning an awful lot along
8:26
the way. We had all of our investors. So
8:30
we're not a large business probably in
8:32
comparison to many of the the CEOs you
8:34
you you get in this podcast the
8:35
businesses they have but in our world at
8:37
200 people that actually is quite large
8:40
and we had 100 investors altogether um
8:43
just a few weeks ago a very important
8:45
part of that gathering is looking at
8:47
what has not gone so well and let's
8:50
really learn learn from that and there
8:53
are lots of lessons frankly an awful lot
8:55
of it is people you know we are backing
8:57
people and that's an obvious thing to
9:00
say for any investor there obviously
9:01
they are backing a management team to
9:03
execute
9:04
but as I said earlier for us as a
9:06
minority investor you know we're not in
9:08
control we are backing incumbent
9:12
management team the entrepreneurs to
9:13
keep on going so we need to make sure
9:16
we're backing the right entrepreneurs
9:18
not just the entrepreneurs right
9:19
entrepreneurs who got the right mindset
9:21
who are open to influence and we can
9:23
work with them and help them as I said
9:26
earlier in terms of how they build their
9:27
team out or whatever it may So, I think
9:29
when that doesn't go so well and we've
9:31
perhaps not quite judged that uh
9:34
correctly, that would maybe one of the
9:36
more obvious themes. We've got some
9:38
quickfire questions for you now. And are
9:40
you ready?
9:43
[Music]
9:45
What was your first job?
9:46
I think it's the most interesting one I
9:48
would say is what we called back home.
9:50
Tatty hawking.
9:51
Okay, you're going to have to translate
9:52
that.
9:53
You don't really want to know that much
9:54
about it and it doesn't really happen
9:55
anymore particularly. Um so potato
9:57
picking right so it's the glamour the
10:00
glamour of being um in sort of October
10:03
halfterm holiday which in Scotland
10:04
actually was called the tatty holiday or
10:07
potato tatty obviously and the glamour
10:10
of of being in a in a field in the in
10:12
the cold in the damp normally being
10:14
shouted at by a farmer.
10:16
Who inspires you?
10:17
The more I thought about that is um is
10:20
my mom actually and not for any business
10:24
reasons. She she she was
10:25
great at investing in regional
10:26
companies. Is that what you're saying?
10:28
I'm sure she could have I'm sure she
10:29
could have been if she only should got
10:31
the phone call much more about sort of
10:33
mindset and approach to life.
10:35
What was the best thing about your job?
10:36
I think because of the volume that we do
10:39
and the types of businesses that we
10:41
interact with and the bread it is people
10:44
and it's the the entrepreneurs that we
10:46
have the you know frankly the privilege
10:47
of working with is is off the charts you
10:50
know. So we're backing up to 50
10:52
companies a year, all doing something
10:55
really quite different, something
10:56
exciting. I have long worked out and
10:59
understood my own sort of behaviors and
11:02
profile. They are very different and
11:04
that's why they can do what they do and
11:06
and the and the the innovation, the
11:08
drive, the belief, the creativity that
11:11
goes with that. And and to be able to
11:14
work with them across lots of different
11:16
sectors is fantastic. If you were prime
11:18
minister for the day, Andy, what would
11:20
you do?
11:20
I would have a day of real celebration
11:24
of entrepreneurship.
11:25
You think they're not celebrated enough
11:26
in the UK?
11:27
Nowhere near enough.
11:28
Forgotten about maybe.
11:29
I think I think so. And I think I think
11:31
s maybe it's a partly a British thing. I
11:33
think success is is viewed
11:36
not as positively as it is. Is it it
11:38
certainly might be at all. I think the
11:40
importance of what you know scale up
11:42
businesses you I mentioned earlier the
11:44
businesses that we've backed and the
11:45
impact they've had in the economy but
11:46
the impact just more broadly that
11:49
scaleups have in terms of the
11:50
disproportionate positive impact they
11:52
have on employment growth and well
11:54
everything really in terms of you know
11:55
tax and innovation and exports is just
11:58
huge and it is hard it is so hard and I
12:02
often speak about you know what we've
12:04
seen in our portfolio but if you were to
12:06
go back over the last what nine years
12:08
Brexit onward and the number of
12:10
different challenges they've had and and
12:13
it's not, you know, it's hard to start a
12:16
business, but it's really hard to then
12:19
really meaningfully scale that business
12:21
up and particularly in more uncertain
12:23
times, which obviously we've had a lot
12:24
of over that last nine years.
12:26
You mentioned the B word, Brexit.
12:30
Is that still having an effect on
12:35
what the industries that you're involved
12:36
in the investing being able to invest in
12:39
companies in the UK?
12:41
It's I wouldn't say it's having a direct
12:42
impact on what we are or not able to do.
12:46
But I would say so I mentioned earlier
12:49
we've currently got about 360 companies
12:51
in the portfolio. So I meet them
12:53
occasionally. We often we often survey
12:55
them. I also I'm quite often um allowed
12:58
out of my sort of ivory tower and I
13:01
what's great is get to meet some of the
13:02
businesses that we are potentially going
13:04
to be investing in and it's very very
13:06
interesting to get a sense from them as
13:08
to what's on their minds and what's
13:10
concerning them and and even a one in
13:12
London just a few weeks ago you know
13:14
Brexit was a large part of the
13:15
conversation of still the impact that
13:17
was having to their mind you know in
13:19
terms of I guess talent particularly
13:22
um ease of doing business uh with Europe
13:24
so it's it we're still we are very
13:26
active and very happy with our
13:27
deployment levels but there's definitely
13:30
a residual uh impact on the economy
13:32
inmemes
13:32
and from your se CEO of BGF
13:36
has Brexit been so far a positive or a
13:40
negative for Britain
13:41
it's hard to measure I would say and
13:44
obviously with with so many different
13:46
companies in so many different sectors
13:47
in different regions and in Ireland as
13:49
well it's very mixed so there will have
13:52
been and we have seen some winners as
13:54
well as some losers in that. Um,
13:57
more losers than winners, do you think?
13:59
We we've not quantified it because it'
14:00
be very very hard because all the other
14:02
challenges that have happened in terms
14:04
of inflation, energy wars, pandemics,
14:07
etc., etc., tariffs, it'd be very hard
14:09
to isolate uh the Brexit aspect. Um, I
14:13
think those people who are much smarter
14:14
than me with an, you know, an economist
14:16
perspective probably would would imagine
14:18
it's more negative than positive.
14:19
I suppose that has been the narrative,
14:20
hasn't it? that is has been quite a big
14:22
factor on slowing UK growth and it's
14:25
slowed in the last quarter. Um, and
14:28
that's been going on for a long a long
14:30
time. You know, there's been this
14:31
narrative of broken Britain.
14:33
Is that what you see? Do you do you
14:35
agree with that narrative? So, we just
14:36
did a I mentioned surveys earlier.
14:39
We did a survey of the portfolio. So,
14:41
you know, we've got views as to what we
14:42
think is happening. Far far better to
14:44
hear that firsthand. And we sit in the
14:46
board of most companies that we're
14:47
backing. So we do have a good insight
14:50
but we had a very strong um response
14:53
rate to the survey and whilst you know
14:56
individuals
14:57
so CEOs and and chairs or businesses
15:00
that we've backed about their own
15:02
independent
15:04
prospects
15:05
their confidence in terms of the broader
15:08
back market backdrop in terms of ease of
15:11
doing business uh has definitely been
15:15
deteriorating over the last um year. It
15:17
feels like the last almost 10 years it's
15:20
been Brexit, then it was COVID, cost of
15:22
living crisis. You know, we're just over
15:25
a year into a new Labor government. Uh
15:28
very difficult budget last year as we're
15:30
speaking today. We've got a budget later
15:32
in in a couple of weeks. Do you think
15:34
that this current government is doing
15:36
enough to support the businesses that
15:38
you invest in? Are they on your side?
15:41
I think the So again, we did cover that
15:44
as part of the survey. So I think I
15:46
think the sentiment and the intent is
15:47
there and we engage with governments
15:49
labor governments on the way in and I
15:51
think definitely a very strong sense of
15:54
intent and desire because I mean it is
15:57
obviously obvious back to again the
15:59
heart of your question the economy UK
16:01
economy desperately needs you know the
16:03
private business sector to be growing
16:05
you know it's so so important
16:08
what the survey comes back with quite
16:10
clearly though is guess a sentiment from
16:12
entrepreneurs that the government
16:15
certainly does not appear to be doing
16:18
enough and probably also very
16:20
importantly a sentiment perhaps
16:22
recognizing the importance of
16:24
entrepreneurial businesses you knowmemes
16:26
scaleups in the UK
16:28
they're not empathetic enough to the
16:30
challenges
16:30
that would be the sense they would have
16:32
and is that your sense as well
16:34
um well I think I think they're be much
16:35
more important than mine because they're
16:36
the ones who are driving the business to
16:38
an extent I think it is difficult I
16:40
think obviously there are so many issues
16:42
just now for them to try and deal this
16:44
and I think some of the things that have
16:47
happened you know I guess employers you
16:49
know NI
16:51
a certain way that's that's national
16:52
insurance and that is that has
16:53
definitely some of our businesses
16:55
particularly those inevitably that are
16:57
much more resource in terms of you know
17:00
number of people it has had a real
17:02
impact and people have either you know
17:04
slowed down growth plans maybe even
17:07
um you know lost lost some people along
17:10
the way because they just have had to so
17:12
business you know business is clearly
17:14
not some amorphous mass that can just be
17:16
you know gone for for tax. Um it's just
17:18
so important that we are working
17:19
together to help support the
17:21
entrepreneurs and as I said I think a
17:22
lot of it there's partly concerns over
17:24
tax and tax going forward as well but I
17:27
think a large part of that I also
17:29
believe is sentiment and it's a
17:31
combination of people wanting to feel
17:34
there is a a country working together to
17:37
support entrepreneurs that is so so
17:39
important and linked to that a sense of
17:42
stability that they can take to make
17:45
longerterm decisions. It's difficult for
17:46
any business to make long-term decisions
17:49
in an unstable backdrop. But for a small
17:51
business making a big bet on do they
17:54
open another, you know, factory or an
17:56
overseas, it's huge, huge. It could be,
17:59
you know, sort of existential decision.
18:02
Do you have confidence that the
18:04
government is on the right track with
18:06
its policies? Now, we've got the budget
18:08
coming up. Your homework is about to be
18:09
marked pretty damn quickly.
18:11
I appreciate that. But
18:13
do you have confidence in them? I think
18:15
I think I think this is important an
18:16
important budget put it that way and I
18:18
guess I guess delicately we will we will
18:20
find out as you said very very uh soon
18:24
and I would really hope there is
18:27
sufficient reassurance to business that
18:29
they can you know carry on and plan and
18:32
um you know commit to to growth plans.
18:34
I'd like to end on this Andy if it's all
18:36
right. Imagine I'm a business owner
18:38
business founder. How do I attract
18:40
capital from BGF? What do I need to do?
18:44
Is it a glitzy PowerPoint slide deck?
18:46
Maybe.
18:47
It is definitely not that. Definitely
18:49
not that. So many of the businesses that
18:52
we back probably like you know a very
18:54
significant proportion we will have got
18:56
to know them and they get to know us um
19:00
over a period of time. So that could be
19:02
several years. Um, so it's much much
19:05
more about getting to know um, us and I
19:08
would encourage anyone who's thinking
19:10
about taking investment from any
19:11
institution. Frankly, that's a hugely
19:13
important part of the process is to get
19:15
to know because once you're in, you're
19:17
in and we're a minority investor. We
19:20
can't force anything to happen. So from
19:21
our perspective, we really want to be as
19:24
confident as we can that it's the right
19:25
relationship for both parties. So I
19:27
think time is very important. getting to
19:30
know us, meeting companies that we've
19:32
already backed and and and for us
19:34
getting to know the individuals and the
19:37
company, clear growth plan, ambition,
19:41
focus, clarity, open to influence,
19:44
mentioned it earlier, I think really
19:46
important, you know, backing smaller
19:48
businesses with capital to do something
19:50
really quite ambitious. Often that does
19:53
need an evolution of the team to deliver
19:55
that.
19:55
Fantastic, Andy. Thank you very much for
19:57
coming on.
19:57
Thank you very much.
20:00
[Music]
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