Procurement of Fund Management Services for North East Mezzanine and Loan Fund The North East Fund seeks to appoint a professional, FCA authorised fund management organisation to deliver an SME investment fund which will make predominantly debt-based investments in revenue-generating SMEs based in the North East of England. The fund will address the persistent market gap in ... THE NORTH EAST FUND LIMITED Procurement of Fund Management Services for North East Mezzanine and Loan Fund - Opportunity Procurement of Fund Management Services for North East Mezzanine and Loan Fund THE NORTH EAST FUND LIMITED F02: Contract notice Notice reference: 2024/S 000-034209 Published 22 October 2024, 4:11pm Watch this notice Contents Open all one. Contracting authorityI. Contracting authorityPress escape key to exit two. Object II. Object three. Legal, economic, financial and technical informationIII. Legal, economic, financial and technical information four. ProcedureIV. Procedure six. Complementary informationVI. Complementary information Download PDF version Share this notice Twitter LinkedIn Email Copy link Print this notice Report concerns about this procurement Section one: Contracting authoritySection I: Contracting authority one.1) Name and addressesI.1) Name and addresses THE NORTH EAST FUND LIMITED Fifth Floor, West One, Forth Banks NEWCASTLE-UPON-TYNE NE13PA Email tenders@northeastfund.org Country United Kingdom NUTS code UKC22 - Tyneside Companies House 10441614 Internet address(es) Main address https://www.northeastfund.org/ one.3) CommunicationI.3) Communication The procurement documents are available for unrestricted and full direct access, free of charge, at https://www.northeastfund.org/business-guidance-support/ Additional information can be obtained from the above-mentioned address Tenders or requests to participate must be submitted electronically via https://www.northeastfund.org/business-guidance-support/ one.4) Type of the contracting authorityI.4) Type of the contracting authority Other type Company Owned by Local Authorities one.5) Main activityI.5) Main activity Economic and financial affairs Section two: ObjectSection II: Object two.1) Scope of the procurementII.1) Scope of the procurement two.1.1) TitleII.1.1) Title Procurement of Fund Management Services for North East Mezzanine and Loan Fund Reference number TNEFL/2024/03 two.1.2) Main CPV codeII.1.2) Main CPV code 66100000 - Banking and investment services two.1.3) Type of contractII.1.3) Type of contract Services two.1.4) Short descriptionII.1.4) Short description The North East Fund seeks to appoint a professional, FCA authorised fund management organisation to deliver an SME investment fund which will make predominantly debt-based investments in revenue-generating SMEs based in the North East of England. The fund will address the persistent market gap in the provision of relatively small amounts of growth finance for SMEs in the North East of England, including unsecured loans and mezzanine / quasi-equity investment. In so doing, it will help to unlock regional growth, build confidence in the SME business base and ensure the region is a great place to start-up and scale-up a business. The Fund has the working title of "Later Stage / Mezzanine Fund" but its final name will be agreed with the appointed fund manager. TNEFL expects to make an initial commitment of investment capital to the Fund of £35m, which will be invested over an Initial Investment Period of c.5 years - equating to an average annual investment by the Fund of £7m during its first five years of operation. This quantum of investment, and the Fund's investment policy is consistent with and will address the funding gaps identified by a market evaluation exercise which was undertaken during the first half of 2024. In a significant development compared to previous regional investment funds, the profile of this Fund has been developed with a view to facilitating a more 'patient capital' approach to investment - by making provision for the initial 5 year investment period to be followed by further periods of new (and follow-on) investments which can potentially extend to a further 10 years. This period of up to 15 years in which the Fund can make both new and portfolio investments will be followed by a Realisation Period of up to 10 years, giving a potential contract duration of 25 years in total. This will enable the manager to provide support over a longer period than previous funds, which should be beneficial for the Fund's investee companies and should also help to maximise the financial returns to the Fund, particularly in relation to mezzanine or quasi-equity investments as it will allow for a longer holding period of share options or warrants, which should give a greater prospect of achieving additional upside liquidity from those instruments. Although the fund is required to be deployed predominantly via amortizing debt instruments (which must comprise 80% of the Fund's investment by value), it also has the scope to take equity positions where appropriate in companies with high growth potential and thereby to target a good number of potential high-cash-multiple / equity returns. The Fund is also required to complete a number of smaller loans, of an average value of £70k. This will enable the Fund to help those SMEs which are seeking to achieve more modest organic growth and are not suited to equity investment but which require a loan (perhaps with a short capital repayment holiday) to help them take-on new contracts and bridge the gap between delivering them and receiving payment from new customers. The Fund's returns, and potentially other sources of capital which may be available to TNEFL (for example, from the regional legacy funds overseen by NEA2F) will be used to facilitate the extension of the Fund's investment activity after the initial investment capital commitment of £35m is fully invested. two.1.5) Estimated total valueII.1.5) Estimated total value Value excluding VAT: £16,700,000 two.1.6) Information about lotsII.1.6) Information about lots This contract is divided into lots: No two.2) DescriptionII.2) Description two.2.2) Additional CPV code(s)II.2.2) Additional CPV code(s) 66122000 - Corporate finance and venture capital services two.2.3) Place of performanceII.2.3) Place of performance NUTS codes UKC - North East (England) Main site or place of performance The North East of England, being the seven Local Authority areas of: Northumberland; North Tyneside; South Tyneside; Newcastle; Gateshead; Sunderland and County Durham. two.2.4) Description of the procurementII.2.4) Description of the procurement Please see Section II.1.4 above for a summary of the contract and the Information Memorandum, which can be downloaded from The North East Fund's website, for details. The procurement process will be conducted in accordance with the Public Contracts Regulations 2015 (as amended) using the Competitive Procedure with Negotiation as detailed in Regulation 29 of those Regulations. The purpose of this procurement is to procure the services of an FCA regulated fund manager. As outlined in Section II.1.4 above, the contract is expected to have an initial duration of 10 years and can be extended by up to a further 15 years, to 25 years in total. Please note that the contract value stated in this Contract Notice is an estimate based on assumptions regarding: the fund management fees tendered; the overall quantum of capital which will be committed to the fund; the duration of the contract and the profile of exits from and impairments to portfolio companies. As such, the ultimate fees paid under the contract could be lower or higher than the estimated contract value stated in this Contract Notice. two.2.5) Award criteriaII.2.5) Award criteria Price is not the only award criterion and all criteria are stated only in the procurement documents two.2.6) Estimated valueII.2.6) Estimated value Value excluding VAT: £16,700,000 two.2.7) Duration of the contract, framework agreement or dynamic purchasing systemII.2.7) Duration of the contract, framework agreement or dynamic purchasing system Duration in months 300 This contract is subject to renewal Yes Description of renewals The contract can potentially last for 25 years, based on its being extended during its term, which will initially be for 10 years but - subject to performance, market demand and availability of capital - is expected to be extended by at least 10 years, on the basis set out in the Information Memorandum and draft contract documents. two.2.10) Information about variantsII.2.10) Information about variants Variants will be accepted: Yes two.2.11) Information about optionsII.2.11) Information about options Options: No Section three. Legal, economic, financial and technical informationSection III. Legal, economic, financial and technical information three.1) Conditions for participationIII.1) Conditions for participation three.1.1) Suitability to pursue the professional activity, including requirements relating to enrolment on professional or trade registersIII.1.1) Suitability to pursue the professional activity, including requirements relating to enrolment on professional or trade registers List and brief description of conditions Participants must be authorised and registered with the Financial Conduct Authority, or must be able to explain how they will become authorised in time to deliver the contract - as detailed in the Selection Questionnaire. three.2) Conditions related to the contractIII.2) Conditions related to the contract three.2.3) Information about staff responsible for the performance of the contractIII.2.3) Information about staff responsible for the performance of the contract Obligation to indicate the names and professional qualifications of the staff assigned to performing the contract Section four. ProcedureSection IV. Procedure four.1) DescriptionIV.1) Description four.1.1) Type of procedureIV.1.1) Type of procedure Competitive procedure with negotiation four.1.4) Information about reduction of the number of solutions or tenders during negotiation or dialogueIV.1.4) Information about reduction of the number of solutions or tenders during negotiation or dialogue Recourse to staged procedure to gradually reduce the number of solutions to be discussed or tenders to be negotiated four.1.5) Information about negotiationIV.1.5) Information about negotiation The contracting authority reserves the right to award the contract on the basis of the initial tenders without conducting negotiations four.1.8) Information about the Government Procurement Agreement (GPA)IV.1.8) Information about the Government Procurement Agreement (GPA) The procurement is covered by the Government Procurement Agreement: Yes four.2) Administrative informationIV.2) Administrative information four.2.2) Time limit for receipt of tenders or requests to participateIV.2.2) Time limit for receipt of tenders or requests to participate Date 22 November 2024 Local time 12:00pm four.2.3) Estimated date of dispatch of invitations to tender or to participate to selected candidatesIV.2.3) Estimated date of dispatch of invitations to tender or to participate to selected candidates 4 December 2024 four.2.4) Languages in which tenders or requests to participate may be submittedIV.2.4) Languages in which tenders or requests to participate may be submitted English four.2.6) Minimum time frame during which the tenderer must maintain the tenderIV.2.6) Minimum time frame during which the tenderer must maintain the tender Duration in months: 6 (from the date stated for receipt of tender) Section six. Complementary informationSection VI. Complementary information six.1) Information about recurrenceVI.1) Information about recurrence This is a recurrent procurement: No six.4) Procedures for reviewVI.4) Procedures for review six.4.1) Review bodyVI.4.1) Review body High Court of England & Wales London Country United Kingdom Back to top 1729683180 Support links About us Contact us Accessibility statement Terms and conditions Privacy notice Cookies Data and API All content is available under the Open Government Licence v3.0 except where otherwise stated. Notices are based on TED XML schema. © European Union, https://ted.europa.eu, 1998–2020 © Crown copyright Review services If you have any concerns about procurement practices, including late payment, you can contact a review service. 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We do this to keep your information secure. 5 minutes remaining until you will be signed out. Continue session Sign out warning you will not be able to undo this action Procurement of Fund Management Services for North East Mezzanine and Loan FundTHE NORTH EAST FUND LIMITED  The North East Fund seeks to appoint a professional, FCA authorised fund management organisation to deliver an SME investment fund which will make predominantly debt-based investments in revenue-generating SMEs based in the North East of England. The fund will address the persistent market gap in ...  Notice typeF02: Contract noticeClosing22 November 2024, 12:00pmContract locationUKC - North East (England)Total value £16,700,000 Publication date22 October 2024, 4:11pm