The British Business Bank, the UK government’s economic development bank, has announced a £50 million cornerstone commitment to Soho Square Partnership Capital Fund II, a lower mid-market structured capital fund targeting established, founder-owned UK businesses. The Bank is joined by several U.S. institutional investors in the fund.
Soho Square Capital is a London-headquartered investment firm that provides structured capital solutions — primarily debt instruments combined with small minority equity positions — to UK-based businesses undergoing transitions such as technology adoption, scaling, or succession events. The model is designed to sit between traditional bank lending, which is often too inflexible for growth-oriented transitions, and conventional private equity, which typically requires significant ownership dilution or an outright sale. By combining senior-secured credit with limited equity participation, Soho Square offers business owners access to institutional capital while allowing them to retain control and continue building their companies.
Fund II will target established companies in the sectors prioritized by the UK government’s Industrial Strategy, with a preference for digital and technology, and professional and business services. The fund will provide loans to companies typically with EBITDA of up to £15 million and turnover of up to £200 million. At least 75% of the fund will be invested in the UK, with a particular focus on businesses across the UK’s nations and regions rather than concentrating capital in London and the Southeast.
The British Business Bank’s cornerstone commitment serves a signaling function — providing institutional validation designed to mobilize additional private capital into the fund. As a cornerstone investor, the Bank will also have the opportunity to co-invest alongside the fund. The commitment aligns with the Bank’s five-year strategic plan, which prioritizes deployment to the eight Industrial Strategy sectors. The British Business Bank supports £23 billion of finance to approximately 64,000 smaller businesses through its core programs.
