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Evaluation of the Scottish Co-investment Fund (SCF) and Scottish Venture Fund (SVF) III and IV


The evaluation assesses the performance of the Scottish Co-Investment Fund (SCF) and the Scottish Venture Fund (SVF), covering Phase III and part of Phase IV of the funds’ operation (July 2015 to March 2020).


Desk research, including a review of the funds' performance data and a review of the policy and market context; stakeholder consultation, including workshops with the transaction and portfolio teams who deliver the funds and interviews with 16 co-investors and 11 beneficiaries; and, an online survey of supported companies, receiving responses from 57 out of 170 beneficiaries (a 33% response rate).


Between July 2015 and March 2020 the funds invested a total of £158m in 229 companies, predominantly in the enabling technologies, life sciences and creative industries sectors; this levered in £494m of private sector investment (approximately a 3:1 ratio) and attracted £5.3m from other public sector bodies; had 29 businesses exit / repay their investments, generating total income of £41.5m and a profit of £5.3 million. Additional income, beyond that from exits / repayments, from interest, dividends, fees and value recovered from write offs totalled £0.87m. The funds also invested in 19 companies with deals that have proceeded to be written off (totalling £6.58m). Fund rationale is supported by evidence on both the demand and supply side. Investors identified an ongoing funding gap at an early stage of development which is addressed by SCF and SVF. - the funds have enabled deals to take place that would otherwise not have been done, increasing the average size of deals, and this has had positive knock-on impacts for the survival, growth and performance of companies. SE and the funds have enabled a higher level of capitalisation in the Scottish marketplace, and the marketplace would be less liquid without the funds. By March 2020 the total actual (net additional) GVA created by portfolio companies was £436.5m to £482.0m (cumulative). The impact ratio of SE funding to GVA was between £1: £1.7 and £1: £1.8. By 2028 companies are forecast to generate £3.6bn – £4.0bn net additional GVA (cumulative), a potential impact ratio of £1: £14 and £1: £15.


The evaluation recommended that where possible, SE should consider any further opportunities to streamline administrative and legal processes; consider what further work can be undertaken to increase awareness and take-up by companies of available SE early-stage advice and support, particularly in areas where SE can add value; continue to pursue opportunities for increased collaboration with SE’s international arm, Scottish Development International (SDI), to showcase investment opportunities and give companies traction with international investors; consider increasing the SCF deal limit from £1.5m to £2m to facilitate larger deals; and investigate the potential for establishing an intervention that supports riskier early-stage opportunities, with a particular focus on start-ups and new to equity investments, to complement SCF and SVF.

Author RSM UK Consulting LLP (RSM)
Published Year 2022
Report Type Evaluation
  • Sectors
    Digital markets and enabling technologies, Life Sciences
  • Enterprise
    Sector-level support
  • Investment
    Equity investment