Venture Capital – Managers to take over Scottish Enterprise VC arm

Scottish Enterprise, the regional development agency, is to sell the bulk of its venture arm, Scottish Development Finance, to management this spring. The move, part of an overhaul instituted by new Scottish Enterprise chief executive Dr Robert Crawford, forms part of a bid to boost the levels of available venture capital for young Scottish companies. Scottish Enterprise will hold a 25 per cent stake in the new entity.

The new structure will operate under the name of Scottish Equity Partners and retain close links with its former parent. Managing director Calum Paterson and his team in 1996 raised an innovative private/public sector fund, Scottish Equity Partnership, winning support from backers including retail banks, Martin Currie Investment Management, Pantheon Ventures, the NatWest Pioneer Fund, Royal Bank Development Capital, Standard Life, Scottish Widows and the Lothian and Strathclyde Pension Funds.

Scottish Equity Partners will launch a new venture fund during the second half of this year with a target of as much as 100 million ($156 million), according to sources close to the venture group, and will be seeking to tap strategic corporate, as well as financial investors.