BoS takes property stake

The Bank of Scotland’s corporate banking arm has invested an undisclosed amount in Northern Venture Capital, a company that funds start-up building firms.

The joint ventures unit of Bank of Scotland Corporate Banking has acquired a 42 per cent stake in Northern Venture Capital for an undisclosed sum.

Northern Venture, founded in 1955, undertakes joint ventures with third party residential property developers. It offers assistance to developers with insufficient capital to secure traditional bank debt facilities in return for becoming a stakeholder in their projects.

As part of the deal, Northern Venture Capital has also received a debt-financing package of £15m to fund planned site purchases and work in progress. The company directors Bill Ainscough and Steve Owen retain control of the business with a 58 per cent stake.

Pauline Bradley, head of joint ventures at BoS, said the deal followed the group’s plans to build a portfolio of joint venture stakes in asset backed businesses that showed good growth potential.

A typical investment she said would be to invest debt plus equity capital in return for weighty equity stakes usually around the 25-50 per cent mark, with the Bank being proactive in driving value.

Since the unit was formed less than two years ago, it has amassed a portfolio of around 44 joint ventures worth around £2.9bn.