Procurement of Fund Management Services for University Commercialisation and Spinout Fund

The North East Fund seeks to appoint a professional, FCA authorised fund management organisation to deliver a University commercialisation and spinout fund in the North East of England. The fund will invest in companies which have emerged from, or are commercialising intellectual property in conjunction with, one or more of: Durham University; Newcastle University; Northumbria University; The University of Sunderland and Teesside University (the "NE Universities").

In doing so, the Fund will drive innovation and R&D investment in the North East, including through translational research, high quality SME innovation support and the development of nationally significant assets through the promotion of the commercialisation of research and spinout creation from these research intensive institutions. The Fund has the working title of the "University Commercialisation and Spinout Fund"; its final name will be agreed with the appointed fund manager.

The North East's Universities and the North East Combined Authority share an objective to drive innovation and R&D investment in the North East, including through translational research, high quality SME innovation support and the development of nationally significant assets through the promotion of the commercialisation of research and spinout creation from research intensive institutions. The Fund will support these objectives by providing risk tolerant and patient investments to relatively high-risk, potential high-growth early-stage ventures which are commercialising research and innovation activity in collaboration with one or more of the NE Universities.

The appointed Fund Manager will be required to work closely and collaboratively with the NE Universities to help identify, catalyse and maximise spinout and other commercialisation activity and thereby generate deal-flow for the Fund. Significant progress has been made on commercialising research and innovation activity at the NE Universities, with collaborative programmes such as the Northern Accelerator helping to achieve over 50 spinouts in recent years.

The NE Universities have developed commercialisation systems and deal terms in response to the recommendations of the Independent Spin Out Review and which are aligned with the University Spin-Out Investment Terms guide. The NE Universities have a sizable pipeline of spinout and other commercialisation opportunities which the appointed Fund Manager will gain access to, and will work collaboratively with the NE Universities to help identify those which are best suited to the Fund and have the greatest potential to achieve significant scale

The procurement process was conducted in accordance with the Public Contracts Regulations 2015 (as amended) using the Competitive Procedure with Negotiation as detailed in Regulation 29 of those Regulations. The purpose of this procurement was to procure the services of a single FCA regulated fund manager.

The contract will have an initial duration of 10 years, but can be extended by up to a further 10 years, to 20 years in total. The contract value stated in this Contract Notice is an estimate based on assumptions regarding the duration of the contract and the profile of exits from, and impairments, to portfolio companies. As such, the ultimate fees paid under the contract could be lower or higher than the estimated contract value stated in this Contract Award Notice and is likely to be higher in the event that additional capital is committed to the fund which facilitates the extension of the investment period beyond the initial 5 year period.