The British Business Bank has announced a £40 million commitment to Frontier Development Capital’s (FDC) newly launched £81.5 million Evolution Fund. This bold step is designed to unlock fresh growth potential for smaller businesses across the Midlands and the North of England, the areas traditionally underrepresented in national funding allocations.
A catalyst for regional growth
The Evolution Fund, co-backed by an additional £40 million from the West Midlands Pension Fund (WMPF), aims to provide between £1 million and £8 million in flexible debt financing to established smaller businesses. Focusing on firms with a strong track record, solid growth potential, and capable management, the fund is sector-agnostic and intended to support a variety of strategic financial activities, including management buyouts, acquisitions, shareholder reorganisations, and debt refinancing.
Beyond typical growth funding, the Evolution Fund stands out for its emphasis on sustainability. A portion of the funding is earmarked to help businesses embed greener practices and move towards achieving net zero carbon emissions, aligning with the UK’s broader climate targets.
A proven regional partner
Founded in 2016 and headquartered in Birmingham, FDC has emerged as a key player in supporting SMEs outside of London and the South East. With more than £200 million invested in regional businesses since inception, FDC has developed deep-rooted networks and expertise in fostering local enterprise. This new fund marks the second collaboration between FDC and the British Business Bank, reinforcing a shared vision of inclusive economic development.
Reinforcing British Business Bank’s Mission
Established in 2014, the British Business Bank is the UK Government’s economic development bank. Its primary mission is to enable sustainable growth and prosperity by improving access to finance for smaller businesses. Through a combination of direct investments, partnerships, and educational resources, the Bank has supported over £17.4 billion of finance to nearly 64,000 businesses.
The Bank also played a pivotal role during the COVID-19 pandemic, administering the government’s Coronavirus loan schemes and the Future Fund, delivering over £80 billion to more than 1.6 million businesses. With a focus on both economic and environmental resilience, the British Business Bank continues to evolve as a cornerstone of UK enterprise support.
New leadership to navigate future risks
As the British Business Bank expands its operations and commitments, it has also taken steps to strengthen its leadership team. Recently, the Bank announced that Joanna Wright will step into the role of Interim Chief Risk Officer from May 2025, bringing with her three decades of financial services experience. Wright previously served as Director of Enterprise Risk at Santander UK and held senior risk roles at Visa Europe, GE Capital UK Bank, and RateSetter.
Her robust experience in enterprise risk, mergers and acquisitions, and regulatory compliance across the UK, US, and France adds strategic depth to the Bank’s risk governance—particularly crucial as it manages increasingly complex financial programs like the Evolution Fund.
Portfolio of investments
The British Business Bank has a growing portfolio of investments aimed at fuelling innovation and sustainability across the UK. It has backed early-stage VC funds, regional development programs, and scale-up accelerators. Notable investments include support for Atomico’s growth-stage tech fund, the Northern Powerhouse Investment Fund, and Midlands Engine Investment Fund, initiatives that have directly empowered SMEs and startups across the country.
Additionally, through its subsidiary British Business Investments Ltd, the Bank delivers commercial investment activities aimed at increasing the supply and diversity of finance for UK businesses. These investments not only fill market gaps but also encourage private sector participation, catalysing broader systemic change in the financial ecosystem.
More than just capital
The British Business Bank’s £40 million commitment to the Evolution Fund is more than just a financial transaction. It is a signal of intent. By channelling substantial resources into the Midlands and North of England, and by partnering with experienced local investment managers like FDC, the Bank is tackling geographic inequality in business financing head-on.
With strong leadership in place, a track record of impact, and a mission grounded in sustainability and inclusivity, the British Business Bank is setting a compelling example of how government-backed institutions can drive meaningful, long-term economic transformation. As smaller businesses across the UK navigate an increasingly complex post-Brexit and post-pandemic landscape, initiatives like the Evolution Fund could very well be the key to unlocking the next wave of regional prosperity.
Adam Kelly, Managing Director and Co-Head of Funds, British Business Bank, said: “We are pleased to continue our support for FDC, having previously backed the FDC Debt Fund in 2020. The British Business Bank is committed to increasing the supply and diversity of finance for smaller businesses. By backing experienced fund managers like FDC, we help improve access to finance for ambitious companies across the UK’s Nations and regions.”
Graham Mold, Head of Growth Capital of Frontier Development Capital, added: “Despite the variety of debt providers in the market, it is still difficult for smaller firms to secure capital as many funders are unwilling to lend sums of under £10m or to support transactions involving SMEs. The Evolution Fund reinforces FDC’s commitment to regional businesses often underserved by traditional lenders. As no two deals are the same, it is also designed to meet the need for tailored SME funding. Our team’s ability to assess risk, structure investments and support resilient businesses makes FDC a valued funding partner.”
Shiventa Sivanesan, Assistant Director – Investment Management and Stewardship at the West Midlands Pension Fund, said: “We’re excited to build on our existing partnership with FDC and British Business Bank as part of our long-term commitment to support regional SMEs. Our investment is expected to deliver competitive returns aligned with our responsible investment values, allowing us to serve the interests of our members. Businesses are operating in an uncertain and challenging environment and by improving their access to funding we can enable them to grow and fulfil their potential. We hope other investors will follow our lead and help to scale up the support SMEs need to grow and thrive.”
