Frontier Development Capital (FDC) has launched a £81.5 million fund to support established small and medium-sized enterprises (SMEs) in the Midlands and North of England with tailored debt financing.
The Evolution Fund will offer flexible loan packages ranging from £1 million to £8 million to SMEs across all sectors. The fund is structured to support business growth, sustainability improvements, and various corporate transactions such as management buyouts, acquisitions, shareholder changes, and debt refinancing.
Backed equally by the West Midlands Pension Fund and the British Business Bank, with £40 million each, the fund is positioned to address a longstanding gap in the market for sub-£10 million business loans. Its eight-year structure features ‘bullet repayment’ terms, enabling companies to defer most capital repayment to the end of the loan period, thus easing short-term cash flow pressures.
FDC, headquartered in Birmingham with offices throughout the UK, has previously invested more than £200 million since its 2016 inception. The Evolution Fund marks its second collaboration with the British Business Bank and its third with the West Midlands Pension Fund.
CMS Cameron McKenna Nabarro Olswang LLP provided legal support for the fundraising and structuring.
The initiative is expected to strengthen regional investment flows and offer a scalable template for further institutional backing in underserved SME markets.
