Clucking About Geography

A recent Northern Way magazine article by Mark l'Anson highlighted that 70% of the fund management 'capacity' is clustered around London. Is it the quality of the company that drives the deal or does geography really matter? Business angels mare certainly more likely to stay closer to home, but professional fund managers really should be where the action is.

Is this a chicken and the egg problem or has the bird well and truly flown? The relative absence of VC money may actually damped demand is an argument the article puts forward. Is it the role of the RDA's to redress this imbalance and provide regional funding to need local business needs? The Northern Way have recently published its first recommendations report ' Realising the £25bn Potential: Stimulating the long term private venture capital markets in the regions'.

The report to my mind misses a key point - supply and demand - it's no use having regional fund managers in place twiddling their thumbs without activities to support and stimulate the innovation ecosystem. At the end of the day it is a fund managers responsibility to make money - not to redistribute wealth.

Activities like Connect are more orientated to helping to stimulate innovation and enterprise at the grass roots level. Putting too much focus on fund management as a means of economic regeneration without regard for the health of the ecosystem is not optimal. Fund managers are tasked with plucking good opportunities out of the ecosystem and then fattening them up. If there are not enough good opportunities, they will look elsewhere. Hence the focus of regeneration should be on creating an environment where good investment opportunities develop. I can't help believing that if the opportunities are there, the fund managers will come to harvest them.