The firm, based in the UK's northwest, is an example of the kind of business that has thrived outside the conventional financial hub of London and the Southeast. It also explains why private banks and wealth managers have developed a boots-on-the-ground presence in recent years.

Private capital is popular because it offers superior returns to compensate investors for less liquidity. The space is booming. However, it is difficult to scrutinise promising companies in sufficient scale to meet demand. Furthermore, how do you ensure that the founders are best equipped to grow their company with your capital? And that’s where harnessing networks of experts comes in.

At Manchester-based Praetura, an investment team sifts through about 200 firms per month into a handful that might make the ground. Additionally, the organisation has been building a diverse investment team of experts from different industries to support the business post-investment. 

This formula makes the Praetura business model very scalable, Dave Foreman, managing director at Praetura Ventures, told WealthBriefing in an interview.

“These people are top quality – they have been there and done it,” Foreman said. 

Foreman gave the example of Steve Caunce, non-executive chairman, as the kind of experienced businessman who has given his expertise to the business. Other operational partners include Helen Verwoert, formerly of Dr Martens.

“Our business is inherently scalable,” Foreman said. “Operational partners give us at least a few days a month of their time and often do much more.”

The operational partners also act as ambassadors and introducers for the wider business.

Praetura business concentrates on health and technology. In technology, for example, it looks at software, software-as-a-service, and in health, areas such as medical products and diagnostics. It does not get involved in drug discovery. It likes early-stage firms but not in businesses that haven’t logged revenues, Foreman said. 

Strong growth across UK
The rise of organisations such as Praetura – which launched its first fund in 2019 (Praetura EIS Growth Fund) and has been carrying out venture capital investment since 2011 – shows that financial life reaches far beyond London and the Southeast. 

As this publication has noted with regional wealth management, the UK has several wealth-generating regions, and the northwest area including Manchester is no exception. It’s a point that Foreman, a proud Mancunian, stresses.

“Manchester is thriving and really going places and we see it is a real opportunity for us to build venture capital in a real scale and to back people in this region. London doesn’t have a monopoly on entrepreneurial talent,” he said. 

Foreman, who started as an accountant at KPMG, has a background in corporate finance, advising on M&A deals and other actions.

Praetura has raised £125 million ($152.7 million) since 2019 across a number of funds, such as the EIS fund, HIS products and regional angel funds. It wants to invest in firms that are “looking to accelerate what they are doing and we are looking to fan the flames rather than start the fire,” as Foreman puts it. 

Company examples
WealthBriefing asked Foreman to give examples of businesses it invests in. 

“We were the first company to invest in Manchester-headquartered Peak, which is a global AI company that specialises in Decision Intelligence (the commercial application of AI to drive revenue and growth). When we first invested in 2016, Peak had just four people in its team. Fast-forward to the current day and Peak works with a long list of global brands like KFC, Nike, PepsiCo and ASOS. The team also has plans to grow to 400 people, having recently announced $75 million in Series C funding, which was led by SoftBank,” he said. 

Another portfolio company he gave as an example is Patchwork Health, which has created an end-to-end workforce management solution, to bring crucial flexibility to staffing in the National Health Service. Patchwork thinks there are over 100,000 NHS vacancies, causing a staffing crisis. Patchwork helps with rigid rotas. The business has two main products, Bank (professional pools of qualified staff) and Rostering (a scheduling staff tool used by the NHS).

A third example is Enthuse, a charity fundraising platform and competitor of Just Giving. It was named the official fundraising partner for London Marathon Events, which covers 13 events including the London Marathon. Enthuse has also partnered with The Great Run Company, which looks after The Great North Run. Expanding beyond the UK, Enthuse has just launched in Ireland.

So what about performance?
Before its present fund structure, Praetura’s exits on investments have included EC3 Brokers, Noblet, PiB and Inspired Energy. The average return from previous exits so far has been 3.6 times.

On an individual level, the firm said that previous exits have yielded returns of: EC3 Brokers (20x), Noblet (6x), PIB (3x), and Inspired Energy (16.0x).