David Wrench, Partner

Thought leadership

Exploring investment opportunities in the South West and Wales

With a strong track record of advising SMEs in the Thames Valley and South of the UK, David Wrench, Investment Director at YFM Equity Partners, is enjoying extending his reach into the South West and Wales, heading up the PE firm’s investment activity in the region.

Over the last 40 years, YFM has come a long way from its northern roots and now invests across the whole of the UK. With a strong heritage and focus on regional investing across a range of sectors, the South West and Wales are a key part of our target market.

There’s so much more to the region beyond its excellent reputation for food, drink and tourism. At just over £135bn, it has a combined economy which is far larger than other higher profile commercial centres such as the North West or the West Midlands. The breadth and depth of the skills base in the South West and Wales is also attractive – it has major strengths in a wide variety of sectors including marine industries, photonics, environmental science, advanced engineering, digital innovation and agritech, to name but a few.

This expertise is being boosted by a wide range of funding initiatives. There continues to be huge investment coming into the region led by organisations such as UK Research and Innovation and its flagship ‘Strength in Places Fund’. This c.£200m fund has committed to investing £25m in an existing regional cluster in South Wales which is focused on advanced semiconductor materials and manufacturing. Investment such as this reinforces the technical and engineering capabilities of the region, making it world-leading in this segment and attracting the best talent to the area.

Another great example is the MyWorld initiative launched in June 2020 by the University of Bristol. This £46m funding initiative aims to develop a creative hub driving major new research and development facilities and partnerships in the screen-based media space with the likes of Netflix, Google and Microsoft – it’s fantastic recognition of the creative expertise and talent in the region.

The South West and Wales also continues to attract growing interest from the private equity community, with a marked increase in activity in the region. In fact, the number of PE deals completed has increased by 8% from 2017 to 2019, with PE deals now making up nearly 21% of all deals transacted in the region.

YFM has played its part in this, providing buy-out funding for companies across a myriad of sectors including medical devices supplier Mangar in Powys and Newport-based Indigo Telcom, supporting the latter’s acquisition of Belcom247. It has also invested growth capital into food-to-go restaurant chain Friska in Bristol.

Having undertaken an ambitious recruitment drive, YFM have doubled their investment team over the last 18 months, reflecting its positive view of the short to medium term opportunities for SMEs in the region. This is just the start of the journey – YFM are actively looking to increase their investment presence in the region to assist growing businesses reach their full potential.

If you would like to discuss with YFM any new investment opportunities in the South West or Wales, please contact David Wrench at [email protected].

Approved for the purposes of Section 21 of the Financial Services and Markets Act 2000 by YFM Private Equity Limited (‘YFM’), which is authorised and regulated by the Financial Conduct Authority (FRN: 122120). YFM is the Investment Manager to British Smaller Companies VCT plc, British Smaller Companies VCT2 plc, YFM Equity Partners Growth I LP, YFM Equity Partners Growth II LP, YFM Equity Partners Buyout I LP and YFM Equity Partners Buyout II LP. YFM Private Equity Limited is ultimately owned by YFM Equity Partners LLP which is registered in England and Wales No: OC384467. Registered Office: 5th Floor, Valiant Building, 14 South Parade, Leeds LS1 5QS.

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