A NEW £15m venture capital fund, targeted at high-growth, small and medium-sized businesses in the North-East is to be launched later this year.

Subject to final contract negotiations with the Small Business Service, the fund will be managed by Northern Enterprise Ltd, the Newcastle venture capital management company.

Capital North-East has been sponsored by regional development agency One NorthEast, in direct response to the difficulties faced by small businesses in raising equity.

The new fund has the potential to help up to 100 companies over a five-year period.

The maximum level of initial investment is being set at £250,000, with the possibility of a further £250,000 at a later date.

Neil Mundy, director of integration at One NorthEast, said: "Capital North-East is specifically aimed at small firms with a sound track record and high growth potential.

"It is notoriously difficult for small businesses to raise this level of equity as most venture capitalists are looking to invest larger sums.

"This fund will begin to address that shortfall and will help businesses to achieve sustainable growth."