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Greater Manchester Fund of Funds (supported by European Structural Investment Funds)



Following the success of Evergreen 1, a North West Urban Development Fund established under the 2007-13 European Regional Development Funding (ERDF) programme, GM was successful in its application for £60m to establish a Fund of Funds structure, with underlying separate Urban Development Funds.

The Fund of Funds will initially manage up to £60m of ERDF investment which will flow through to two created sub-funds. The proposed Evergreen 2 fund will invest up to £45m of ERDF monies (made up of £30m from Priority 1a of the 2014-20 ERDF Operational Programme and £15m from Priority 4b), whilst a Low Carbon Investment Fund will receive £15m entirely under Priority Axis 4a.

Strategic Focus:

Since 2014, England has moved to one national Operational Programme. This programme sets out the strategy for smart, sustainable and inclusive growth and the achievement of economic, social and territorial cohesion.

The strategy is built around functional economic areas (in the form of Local Enterprise Partnerships) and reflects the main priorities for development across these. It focuses most resources on the core objectives of innovation, SME competitiveness and the low carbon economy but recognises the need for targeted interventions under other objectives where EU funding can unlock barriers that matter strategically to specific areas in England. 

GM identified the following priorities for the GM Fund of Funds:

1a – Enhancing research and innovation infrastructure and capacities to develop research and innovation excellence, and promoting centres of competence, in particular those of European interest (£30m within Evergreen 2):

Investments made by our Urban Development Fund will enhance research and innovation (R&I) infrastructure and capacities to develop R&I excellence, and promoting centres of competence, in particular those of European interest.

Science and Life Sciences are a key growth sector for GM. We are well positioned to deliver around this objective building upon the Life Sciences Fund, the 2014-15 investment into the National Graphene Institute (NGI), the £235m Sir Henry Royce Advanced Materials Institute, supported by other regional universities and the private sector, these assets will play a crucial role in addressing the challenges facing society and making advanced materials a catalyst for economic growth in the UK. We intend to build further on this base in places such as future expansions and new developments on the Corridor in Manchester.

The Ex-Ante Assessment undertaken provided confidence about the current and potential demand from final recipients for investment and the Urban Development Fund will provide much needed finance in this area to allow viable projects to capitalise on the commercialisation and research opportunities flowing from vibrant sector of activity. The Evergreen Fund made a number of investments to comparable projects such as Citylabs and The Hub.  

Evergreen 2 will develop, retain and exploit excellence in GM’s Science / technology / Innovation assets, through investment in the appropriate volume, specification and flexibility of commercial floor-space.  This will include investment in the development of new sites, the remediation and redevelopment of brownfield and the development / refurbishment of commercial floorspace.

4a – Promoting the production and distribution of energy derived from renewable sources (£15m within the Low Carbon Fund):

The Low Carbon Fund will invest £15m ERDF into activities eligible under this Investment Priority. Its objective is to increase the small scale renewable energy schemes. ERDF resources have been allocated to support initiatives such as micro-energy installations, low carbon/ renewable energy generation, renewable/ low carbon decentralised energy networks, and ground/air source heat pumps. The Low Carbon Investment Fund will support measures to increase the production of renewable and low carbon energy through the deployment of renewable and low carbon heat and power through, for example, decentralised energy networks.

The activities undertaken by the final recipients will support delivery of the output indicators identified under this Investment Priority.

4b – Promoting energy efficiency and renewable energy uses in enterprises (£15m within Evergreen 2):

Evergreen 2 will invest £15m ERDF resources under this Investment Priority. The objective of the Investment Priority is to promote increased energy efficiency in particular in SMEs. The Investment Priority presents an opportunity to use ERDF resources to support improvements in the buildings. This includes energy efficient new buildings as well as deep renovations of existing buildings. The Investment Priority recognises the use of Financial Instruments to deliver the creation and refurbishment of urban infrastructure.

Our investments will increase innovation in, and adoption of, low carbon technologies. Such projects cannot attract conventional private finance but the public sector is able to support a limited number of viable projects in the short to medium term until the mainstream finance market matures.

The activities undertaken by the final recipients will support delivery of the output indicators identified under this Investment Priority.



The North West of England, its economy and its diverse communities have demonstrated significant growth since the inception of the Evergreen Fund. However, as the country emerges from a deep recession and still attempts to stabilise the economy, there remain hard choices to be made about public expenditure and the context for regeneration is a challenging one. The new approach to investment that has been developed through the Local Enterprise Partnerships and local authorities no longer assumes that resources necessary to create the conditions for growth will be available from the public sector, and focuses on recyclable investment leveraging private sector capital. Market constraints and lending regulation have reduced the accessibility of debt finance to support viable schemes. Evergreen has recognised these problems and has developed a proposition which has successfully created a new framework for growth - a now tried and tested investment model with clear priorities, and robust and professional scrutiny and governance arrangements. 

This is why the North West Evergreen Fund remains so critical to our region’s prospects. Evergreen has become a major investor in the North West economy, underpinning its long-term growth and stability through the prudent investment of public and private sector funding.

Whilst prime schemes in prime areas of the region are starting to attract investment at some positions in the funding stack, particularly if there is a strong pre let element to the scheme, there is still a clear need for the Funds, both to bolster private sector investment in the prime opportunities, and to fund schemes that are outside of the prime classification.

Low carbon and renewable energy schemes also struggle to attract investment as they tend to have high up-front capital costs and relatively low long-term returns. Whilst they can provide long-term stable income once operational, these initial high capital costs and long project lifetimes mean that they can struggle to meet commercial funding hurdle rates. The challenge of guaranteeing revenue streams over long lifetimes can also result in schemes having a higher risk profile that conventional property investments. This is a particular barrier to funders who may not have invested in low carbon or renewable schemes previously. The provision of public sector funding can help to leverage private sector investment by assisting with funding for the initial capital costs, and demonstrating long-term stable returns.


Basis for Investment

The funds should not supplant lines of private finance for projects that would otherwise be available. On this basis, each sub-fund will only invest in circumstances where its intervention can enable qualifying projects to proceed (or for delivery to be significantly accelerated) in circumstances where this would not be the case if purely privately financed. In this way, the intention is to leverage the benefits of ERDF investment as far as possible – applying funding which is complementary to private sector senior debt and equity.


For more information on any of the above, please email