Decision details

(1)      It was noted that on 23 July 2021, the WMCA Board approved the Outline Business Case for the West Midlands Co-Investment Fund, which allocated £12.5m from the WMCA Investment Programme, that the principles had not altered, and no further funding was being requested from WMCA.

(2)      It was noted that West Midlands Pension Fund had indicated it would provide, as a minimum, the remaining £12.5m required to launch the West Midlands Co-Investment Fund, subject to its approvals process, and that the West Midlands Co-Investment Fund would not launch until

funding was in place for the full £25m.

(3)      It was noted that the risks and rewards arising from the £25m fund between the WMCA and the West Midlands Pension Fund were intended to be split equally and that any deviation from this principle would be agreed by the Director of Finance, in consultation with the seven constituent area Finance Directors.

(4)      It was noted that the delivery vehicle options appraisal concluded with a preferred option of utilising West Midlands Development Capital, subcontracting investment management to a third-party Fund Manager (subject to procurement process).

(5)      Approval was delegated to the Director of Finance (supported with advice and in consultation with the Finance Directors Group) to flex the fund’s equity/debt investment ratio based on market evidence.

(6)      The request for the potential increase to the investment size of the Fund pre/post fund launch was approved, subject to:

·       The WMCA’s own investment of £12.5m not increasing (ie. no further funds were required from WMCA sources, as a result of third-party investor interest).

·       There being no detriment to risk or rewards to the WMCA and the objectives and targets indicated in the Full Business Case were to be achievable.

·       WMCA Statutory Officers agreeing to the amendments (supported by advice and in consultation with the seven Finance Directors Group).

·       Any new investor entering the fund would be subject to due diligence and ultimately approved at the Investment Board.

(7)      The negotiation and approval of commercial terms with the Funding Partner and Fund Manager was delegated to the Director of Finance.

(8)      It was noted that WMCA had the potential to recycle part or all of its £12.5m grant contribution (subject to fund performance).