North East Business Insider Year-End Q&A with Jonathan Luke, Chief Executive, NEL Fund Managers.
How was 2022 for NEL? Did you experience a lot of activity?
Completing our final investments of the year in the last week has enabled us to record our busiest ever year, with more than £5.7m invested in a wide range of businesses across the region.
Alongside this, we’ve helped many of our investees access grant schemes which work alongside our growth capital to help effect generational change, support the launch of new products, services and ideas, and pursue low carbon and other business change agendas. The close working relationships that we maintain with our portfolio businesses has also been very important through a year of considerable challenges for us all.
Are there any specific deals that you worked on in the year that you are particularly proud of / excited about?
It’s impossible to pick individual companies, but we’re confident that, even in a difficult environment, we’ll be seeing many of the investments we’ve made this year resulting in North East firms achieving success on the national and international stage
In terms of investing in North East businesses, are there any sectors that are in demand or attractive at the moment?
As a generalist investor, we work with businesses across a broad range of industries, and while some sectors are clearly experiencing particular challenges, others are thriving.
Our focus is always on the ability of high-quality management teams to develop and deliver robust business plans with the support of our growth capital, regardless of the industry in which they’re operating.
Have any economic headwinds impacted the market this year and do you expect to see these challenges having any impact moving forward?
Sadly, there have been many issues that North East businesses have had to deal with, including supply chain delays, labour shortages, the energy crisis, inflation and the war in Ukraine, and these won’t be resolved very quickly.
However, despite this, we’ve taken confidence from the positive and progressive conversations we’re having with many current and potential investees on the ways in which they’re working to overcome them, and overall, the regional economy seems to be coping better than might have reasonably been expected.
The North East business community has always been incredibly resilient and resourceful – success is often hard won and that enduring mindset will see many companies through these difficult times.
What are NEL’s plans for the new year? And what do you hope to achieve at the helm?
It’s going to be a big year for us as we focus on both delivering our existing contracts and continue to evolve new ways of working that will help develop new income streams and win new contracts. We’re always looking to improve how we work in every area of the business, while I’m also personally looking to ensure that all our team members feel valued and motivated as the business moves forward.
Are there any trends you expect to see in 2023?
Investing in businesses that support the low carbon and Net Zero agendas has been an increasing focus for us in recent years and we’re expecting to see this become even more important in 2023 and beyond.
Putting environmental, social and governance (ESG) principles at the heart of their operations is fast becoming essential for every type of business, rather than simply something that’s the right thing to do, and it impacts not just on their own ways of working, but on their suppliers, customers, stakeholders and employees.
Business owners and managers need to be fully aware of and acting on these matters if they want to be able to meet the procurement criteria for large companies and government departments, not to mention those of growth capital investment funds.