Fund Management Services Contracts

Fund Management Services Contracts

a) To select a panel of Financial Conduct Authority (FCA) authorised fund management companies with the ability to deliver early stage funds and/or later stage funds.

United Kingdom-Newcastle upon Tyne: Corporate finance and venture capital services

2016/S 102-182784

Contract notice

Services

Directive 2004/18/EC

Section I: Contracting authority

I.1)Name, addresses and contact point(s)

North East Combined Authority
Quadrant, Cobalt Business Park, The Silverlink North, North Tyneside
For the attention of: Mrs Denise Pearson
NE27 0BY Newcastle upon Tyne
UNITED KINGDOM
Telephone: +44 1916435651
E-mail: denise.pearson@northtyneside.gov.uk

Internet address(es):

General address of the contracting authority: http://www.northtyneside.gov.uk/

Electronic access to information: https://procontract.due-north.com/register

Electronic submission of tenders and requests to participate: https://procontract.due-north.com/register

Further information can be obtained from: North East Combined Authority
Quadrant, Cobalt Business Park, The Silverlink North
For the attention of: Mrs Denise Pearson
NE27 0BY North Tyneside
UNITED KINGDOM
Telephone: +44 1916435651
E-mail: denise.pearson@northtyneside.gov.uk

Specifications and additional documents (including documents for competitive dialogue and a dynamic purchasing system) can be obtained from:North East Combined Authority
Quadrant, Cobalt Business Park, The Silverlink North
For the attention of: Mrs Denise Pearson
NE27 0BY North Tyneside
UNITED KINGDOM
Telephone: +44 1916435651
E-mail: denise.pearson@northtyneside.gov.uk

Tenders or requests to participate must be sent to: North East Combined Authority
Quadrant, Cobalt Business Park, The Silverlink North
For the attention of: Mrs Denise Pearson
NE27 0BY North Tyneside
UNITED KINGDOM
Telephone: +44 1916435651
E-mail: denise.pearson@northtyneside.gov.uk

I.2)Type of the contracting authority

Body governed by public law

I.3)Main activity

Economic and financial affairs

I.4)Contract award on behalf of other contracting authorities

The contracting authority is purchasing on behalf of other contracting authorities: yes

North East Combined Authority
Quadrant, Cobalt Business Park, The Silverlink North
NE23 0BY Newcastle upon Tyne
UNITED KINGDOM

Section II: Object of the contract

II.1)Description

II.1.1)Title attributed to the contract by the contracting authority:

Provision of Fund Management Services.

II.1.2)Type of contract and location of works, place of delivery or of performance

Services
Service category No 6: Financial services a) Insurances services b) Banking and investment services

NUTS code UKC

II.1.3)Information about a public contract, a framework agreement or a dynamic purchasing system (DPS)

The notice involves the establishment of a framework agreement

II.1.4)Information on framework agreement

Framework agreement with several operators
maximum number of participants to the framework agreement envisaged: 0

Duration of the framework agreement

Duration in years: 4

Estimated total value of purchases for the entire duration of the framework agreement

Estimated value excluding VAT:
Range: between 25 000 000 and 137 500 000 GBP

II.1.5)Short description of the contract or purchase(s)

Summary:
— The UK Government and EU are supportive of using Financial Instruments as public policy measures to address market failure and stimulate business growth, job creation and technology development on a sustainable basis.
— The North East Combined Authority (NECA) is procuring a panel of Fund Managers, on behalf of itself and stakeholders (Participating Authorities) in the North East Local Enterprise Partnership area. NECA is acting as the Commissioning Authority under this process.
— A successor to the Finance for Business North East (FBNE) Fund-of-Fund programme is being established in the North East LEP area and this panel of Fund Managers will used by the North East LEP Area Fund of Funds Implementing Body to select FCA qualified Fund Managers to manage the Investment Funds (sub-funds) created under this North East LEP Area Fund of Funds Programme (which will invest across the whole of the North East LEP area).
— In addition, the panel may also be used by any of the other Participating Authorities (including The North East LEP Area Fund of Funds Implementing Body, North East Access to Finance (NEA2F), North East Finance (NEF), the North East Local Enterprise Partnership (North East LEP), Business Durham and the local authorities of the North East LEP area) to secure Fund Management services for other financial instrument projects which they want FCA qualified investment managers to deliver.
The Contracting Authority:

The North East Combined Authority (NECA) is the Contracting Authority for the 1st stage of this procurement process (up to the appointment of the Framework Panel). The Framework Agreements will therefore be between the Panel Members and NECA. The Contracting Authority will subsequently allow 1 or more other Participating Authorities to access the concluded Framework Agreement, without creating any obligation on any of them to do so. In that event, the contractual relationship for any resulting Contract would be between the approved individual body (Participating Authority) accessing the Framework Agreement and the successful Panel Member.

Background:
The purpose of this procurement exercise is:
a) To select a panel of Financial Conduct Authority (FCA) authorised fund management companies with the ability to deliver early stage funds and/or later stage funds and / or small loan funds across the North East Local Enterprise Partnership (North East LEP) area (comprising: Northumberland, North Tyneside, South Tyneside, Newcastle, Gateshead, Sunderland and Durham) and;
b) To subsequently use this Framework Panel to select Fund Managers to Manage Investment Funds.
On the basis of a detailed ex-ante assessment and considerable stakeholder consultation, the 3 Lots for which a Framework Panel is being created, are as follows:
— Lot 1 — Fund Management Contracts awarded under this Lot will focus on Early-Stage Investment Funds;
— Lot 2 — Fund Management Contracts awarded under this Lot will focus on Later-Stage Investment Funds;
— Lot 3 — Fund Management Contracts awarded under this Lot will focus on Small Loan Funds.
Both Lot 1 and Lot 2 will require Fund Managers to use a variety of financial instruments and utilise their ability to potentially deploy debt, equity and mezzanine finance. Lot 3 requires Fund Managers to deploy smaller amounts of predominantly debt finance.
The procurement exercise will be undertaken via a 2-stage process, using a Competitive Procedure with Negotiation (CPN) procedure. As outlined above, the 1ststage of the process will lead to the appointment fund management companies to a Framework Panel. The 2nd stage of the process will lead to the appointment of fund management companies (selected from the Panel) to manage specific Investment Funds created under each of the 3 Lots (undertaken via a mini-competition process).

The Framework Panel may be utilised by:
— The North East LEP Area Fund of Funds Implementing Body — to identify and procure Fund Managers for the North East LEP Area Fund of Funds programme (that will invest across all of the North East LEP geographic area);
— Any of the Participating Authorities — to identify and procure Fund Managers for Financial Instrument programmes that require FCA qualified fund managers (that will invest across all or part of the North East LEP geographic area — as specified by the relevant Participating Authority at the time of call-off).
The North East LEP Area Fund of Funds Programme:
The North East LEP Area Fund of Funds programme is expected to be capitalised with circa 120 000 000 GBP of contributions from: the European Regional Development Fund 2014-2020 programme; returns generated from previous UK government and ERDF backed venture capital funds; a loan of circa 60 000 000 GBP from the European Investment Bank (EIB) and other sources of funding that may become available subsequently.
The programme will invest into a number of new venture capital and loan funds which are likely to be structured as limited partnerships and managed by independent, FCA-authorised fund management companies.
A North East LEP Area Fund of Fund Implementing Body is expected to be appointed by DCLG. The Implementing Body’s responsibilities include:
— Overall project delivery and regulatory compliance responsibility;
— ERDF grant recipient and responsibility for achieving ERDF outputs and objectives;
— The monitoring and performance management of fund managers appointed under the North East LEP area Fund of Fund programme.
Once appointed, the Implementing Body will be able to use the Framework Panel procured by NECA in order to procure the North East LEP Area Fund of Fund sub-fund Managers. This will be done through mini-competitions for contract opportunities which fall under the relevant Lot. The Implementing Body will enter into Limited Liability Partnerships with the successful Fund Managers whose services are called-off under the Framework Agreements.
The precise nature and size of the investment funds to be launched under the North East LEP Area Fund of Funds programme will be communicated to fund management companies at the mini-competition stage. However, at this stage, it is anticipated that a suite of 5 funds will be created under the programme in the North East LEP area. A number of the key economic growth ‘outputs’ that are associated with the operation of the North East LEP Area Fund of Funds programme are summarised below:
Fund Size — 120 000 000 GBP;
No of Investments — Circa 630;
Jobs created — 3 700;
Private sector investment leverage — 120 000 000 GBP;
Legacy generated — 80 000 000 GBP.
Investments under the North East LEP area Fund of Fund programme (depending on the individual fund) are expected to range between 10 000 GBP and 2 000 000 GBP and most funds are expected to be between 20 000 000 GBP and 30 000 000 GBP in size. Funds created under the North East LEP Area Fund of Funds programme are likely to be able to invest in all eligible business sectors in accordance with Contracting Authority requirements and EC State aid regulation eligibility rules.
Based on the analysis undertaken for the development of the North East LEP Area Investment Strategy, 3 Framework Lots have been identified:
— Lot 1 (Early-stage funds);
— Lot 2 (Later-stage funds);
— Lot 3 (Small loan funds).
For the purposes of the North East LEP Area Fund of Fund programme only, Fund managers are expected to be permitted to manage only 1 of the investment funds procured under Lots 1 and 2. It is however possible for fund managers: (a) To bid for more than 1 Lot in order to be appointed to the framework panel for multiple Lots; and (b) Be selected to manage a fund under Lot 1 or Lot 2 as well as a fund under Lot 3.
Use of the Framework by Participating Authorities:
In addition to its use under the North East LEP Area Fund of Fund programme, the Framework may also be used by Participating Authorities to call-off fund management services in order to secure Fund Managers for other Financial Instrument (FI) projects which they want FCA qualified investment managers to deliver. At present it is not clear to what extent the Framework will be used in this way.
The relevant details of any call-off by Participating Authorities will be confirmed at the time of such call-off including: (a) The extent to which procured funds cover all or part of the North East LEP Area; and (b) The extent to which funds are able to invest in all eligible business sectors or are sector specific.
Type of Procedure:
Competitive Procedure with Negotiation;
Reservation of Right to Award without Negotiations.
Pursuant to Regulation 29 (15) the Contracting Authority reserves the right to award the framework contract on the basis of the initial tenders without conducting negotiations.

II.1.6)Common procurement vocabulary (CPV)

66122000, 66000000, 48812000

II.1.7)Information about Government Procurement Agreement (GPA)

The contract is covered by the Government Procurement Agreement (GPA): no

II.1.8)Lots

This contract is divided into lots: yes
Tenders may be submitted for one or more lots

II.1.9)Information about variants

Variants will be accepted: no
II.2)Quantity or scope of the contract

II.2.1)Total quantity or scope:

The total fund management fees payable over the life-cycle of North East LEP Area Fund of Funds product funds will be in accordance with EU guidelines for publicly backed venture capital funds.
Estimated value excluding VAT:
Range: between 25 000 000 and 137 500 000 GBP

II.2.2)Information about options

Options: no

II.2.3)Information about renewals

This contract is subject to renewal: no

II.3)Duration of the contract or time limit for completion

Duration in months: 48 (from the award of the contract)

Information about lots

Lot No: 1 Lot title: Early Stage Funds

1)Short description

1) Short description: Scope Funds for which contracts will be awarded under Lot 1 will address the demand from SMEs at the early-stage of their development and will invest in less mature business, some of which may be at the pre-revenue generation stage. The services which will be required under Lot 1 include: — Working with a wide range of organisations and with professional services sector and business support intermediaries in order to support the growth of early stage companies (For example: regional universities, science and technology parks, innovation networks, business incubators, business angel and venture capital investors, banks, accountants, law firms and business network / membership organisations). — Investing across multiple eligible business sectors in accordance with Contracting Authority requirements and EC State aid regulation eligibility rules. — Making follow-on investments into businesses where successful initial investment has provided the potential to achieve good commercial and economic returns. — Both Lot 1 and Lot 2 require Fund Managers to utilise a variety of financial instruments (including equity, mezzanine and debt finance). However, Lot 1 in particular, will require Fund managers to utilise expertise in early stage proof of concept, seed capital and equity investments. Proof of Concept investment refers to investment which funds the following activity: market assessment, product costing, business case development, technology verification, prototyping and scale up studies, intellectual property development. This can take the form of a convertible loan or pure equity. — Operating funds under management in accordance with the terms of the Limited Partnership Agreement entered into with the Contracting Authority / Participating Authority and in compliance with the agreed Fund Management Agreement. — Concluding equity, quasi-equity and debt investments (as appropriate to the fund’s investment type), ranging in value up to 1 000 000 GBP (in accordance with the investment policy of the individual investment fund, as determined and set out in the Fund Management Agreement), in eligible SMEs located in the North East LEP area (as required by the Contracting Authority / Participating Authority). — Identifying SMEs and pre-start enterprises which are eligible for investment in accordance with the rules of the fund and conducting appropriate commercial and technical due diligence and deal structuring activities. — Generating deal flow and working with investee companies across all required parts of the North East LEP area (as defined by the Contracting Authority / Participating Authority) before and after concluding investments. — Conducting technical and commercial due diligence on and making investments in companies operating across multiple sectors and with diverse business models. — Ensuring that services are delivered across all required parts of the North East LEP area (as defined by the Contracting Authority / Participating Authority) in a manner which stimulates enquiries and applications from SMEs based in all parts of the area served by the relevant fund, and all sub-regional targets included in the Fund Management Agreement. — Addressing how investments and impact will be achieved sub-regionally in order to ensure each area (more developed and transitional areas) maximises its allocation. — Managing the funds under management so that they meet or exceed the output targets specified in the Fund Management Agreement, which may include: investing the full amount of capital committed; investing in a target number of SMEs and concluding a target number of initial investments and follow-on investments; supporting a specified number of enterprises; achieving a specified average investment size; creating jobs within investee SMEs, etc. — Maximising, where appropriate, the additional investment made by private sector co-investors into investee companies (investment leverage). — Managing the investment portfolio to add value to investee companies and achieve profitable exits for the fund(s). — Where appropriate, participating in the management of investee companies by appointing executive or non-executive directors to their boards. — Managing funds under management so as to maximise the returns to the investors/legacy fund while minimising the operational costs and the costs to investee companies. — Performing all necessary finance and accounting functions for the fund (as appropriate to the legal structure of the fund), including keeping proper accounting records, preparing accounts, preparing valuations of individual investments and of the fund portfolio as a whole. — Performing administrative functions on behalf of the fund as appropriate to the legal structure of the fund including, for example, the services of the general partner of a limited partnership; representing the fund/partnership in engaging agents, solicitors, accountants, custodians, consultants, etc. — Monitoring the investment portfolio and providing regular reports on investment activity, fund performance and related outputs to the Contracting Authority / Participating Authority. In addition to the typical investment fund performance reporting requirements (financial metrics), the appointed Fund Managers will be required to monitor and report on a variety of additional ‘economic growth return’ metrics / outputs required by investors (e.g. jobs created, enterprises supported and new companies created, etc.) which will be agreed with the Contracting Authority, Participating Authority or Implementing Body. — Operating the Funds at all times in accordance with all relevant EC State aid regulations and any guidance given by the Contracting Authority / Participating Authority in relation to this. — Following all guidance given by the Contracting Authority / Participating Authority as it relates to the branding of the individual sub-Funds. This may include the utilisation of a ‘common brand’ across all of the North East LEP Area Fund of Funds sub-funds. — Marketing the investment fund(s) to the appropriate market sectors and professional services intermediaries, in accordance with any directions or procedures stipulated in the Fund Management Agreement. — Maintaining networks in financial markets and with entrepreneurs, investors and professional intermediaries. — Maintaining complete and accurate records in relation to the activities of the fund(s) and retaining them for the prescribed period in accordance with the detailed requirements which will be specified in the Contract. — Dealing with all Contracting Authority audits and requests for ad hoc information. Examples of early-stage funds which may be procured under the North East LEP Area Fund of Fund programme include: Fund 1 — Innovation Fund (including the provision of Proof of Concept Funding) — designed to accommodate the needs of early-stage innovative companies at the pre-revenue and seed funding stages via both equity and convertible loan instruments. The target of this fund would be — but not restricted to — companies in the technology, digital, science and R and D sectors. It is anticipated that such a Fund might invest up to the 400 000 GBP level. Fund 2 — Early-Stage Fund — intended to support young and emerging companies at the seed and start-up stage. It is envisaged that the Early-Stage Fund would focus predominantly on equity investments up to the 1 000 000 GBP level. Call-off Under the North East LEP Area Fund of Funds Programme it is anticipated that there will be 2-3 call-offs under Lot 1. Call-offs will be achieved through mini-competitions between the panel members for the relevant Lot. The duration of such call-offs is likely to be for the life of the Fund (i.e. approximately 10 years but extendable by up to 4 years, i.e. to 14 years in total). It is not possible at this stage to predict the number and duration of call-offs by Participating Authorities outside of the North East LEP Area Fund of Funds Programme.

2)Common procurement vocabulary (CPV)

66122000, 66130000

3)Quantity or scope

4)Indication about different date for duration of contract or starting/completion

Duration in months: 0 (from the award of the contract)
5)Additional information about lots

Lot No: 2 Lot title: Later Stage Funds

1)Short description

Funds for which contracts will be awarded under this Lot will address the demand from SMEs at the later-stage of their development (e.g. growth and expansion stages) and will invest in more mature businesses which are likely to be generating revenue and profitable. The services which will be required are likely to include: — Working with a wide range of organisations and with professional services sector and business support intermediaries in order to support the growth and expansion of companies (for example: science and technology parks, innovation networks, business incubators, business angel and venture capital investors, banks, accountants, law firms and business network/membership organisations). — Investing in all eligible business sectors in accordance with Contracting Authority requirements and EC State aid regulation eligibility rules. Both Lot 1 and Lot 2 will require Fund Managers to use a variety of financial instruments and deploy mezzanine, debt and equity finance successfully. — The funds procured under Lot 2 are likely to include investment funds making larger investment at the higher end of the investment ‘ladder’ (companies requiring a significant cash injection to facilitate a step change in the growth of their business). — Funds procured under Lot 2 may also enable Fund Managers to participate in MBO/MBI type transactions (subject to observing all relevant EC State Aid regulations). — Operating fund(s) in accordance with the terms of the Limited Partnership Agreement entered into with the Contracting Authority / Participating Authority and with the agreed Fund Management Agreement. — Concluding equity, quasi-equity and debt investments (as appropriate to the fund’s investment type), ranging in value up to 2 000 000 GBP (in accordance with the investment policy of the individual investment fund, as determined by the Contracting Authority / Participating Authority and set out in the Fund Management Agreement), in eligible SMEs located in the North East LEP area. — Identifying SMEs which are eligible for investment in accordance with the rules of the fund, conducting appropriate commercial and technical due diligence and structuring deals. — Generating deal flow and working with investee companies in the North East LEP area before and after concluding investments. — Conducting technical and commercial due diligence on and making investments in companies operating across multiple sectors and with diverse business models. — Addressing how investments and impact will be achieved sub-regionally in order to ensure each area (more developed and transitional) maximises its allocation. — Ensuring that services are delivered across all parts of the North East LEP area (as determined by the Managing Authority / Participating Authority) in a manner which stimulates enquiries and applications from SMEs based in all parts of the area served by the relevant fund, and all sub-regional targets included in the Fund Management Agreement. — Managing the fund(s) so that it / (they) meets or exceeds the output targets specified in the Fund Management Agreement, which will relate to outputs such as: investing the full amount of capital committed; investing in a target number of SMEs and concluding a target number of initial investments and follow-on investments; supporting a specified number of enterprises; achieving a specified average investment size; creating or safeguarding jobs within investee SMEs, etc. — Maximising, where appropriate, the additional investment made by private sector co-investors into investee companies (investment leverage). — Managing the investment portfolio to add value to investee companies and achieve profitable exits for the fund(s). — Where appropriate, participating in the management of investee companies by appointing executive or non-executive directors to their boards. — Managing the investment fund(s) so as to maximise the returns to the investors/legacy fund while minimising the operational costs and the costs to investee companies. — Performing all necessary finance and accounting functions for the fund (as appropriate to the legal structure of the fund), including keeping proper accounting records, preparing accounts, preparing valuations of individual investments and of the fund portfolio as a whole. — Performing administrative functions on behalf of the fund(s) as appropriate to the legal structure of the fund including, for example, the services of the general partner of a limited partnership: representing the fund/partnership in engaging agents, solicitors, accountants, custodians, consultants etc. — Monitoring the investment portfolio and providing regular reports on investment activity, fund performance and related outputs to the Contracting Authority / Participating Authority. In addition to the typical investment fund performance reporting requirements (financial metrics), the appointed Fund Managers will be required to monitor and report on a variety of additional ‘economic growth return’ metrics / outputs required by investors (e.g. jobs created, enterprises supported and new companies created, etc.) which will be agreed with the Contracting Authority / Participating Authority. — Operating the Funds at all times in accordance with all relevant EC State aid regulations and any guidance given by the Contracting Authority / Participating Authority in relation to this. — Fund managers will be required to follow all guidance given by the Contracting Authority as it relates to the branding of the individual sub-Funds. This may include the utilisation of a ‘common brand’ across all of the North East Fund of Fund sub-funds. — Marketing the investment fund to the appropriate market sectors and professional services intermediaries, in accordance with any directions or procedures stipulated in the Fund Management Agreement. — Maintaining and exploiting networks in relevant investment communities, in particular the venture capital investment/fund manager community; maintaining networks in financial markets and with entrepreneurs, investors, and professional intermediaries. — Maintaining complete and accurate records in relation to the activities of the fund and retaining them for the prescribed period in accordance with the detailed requirements which will be specified in the Contract. Examples of the later-stage funds which may be procured under the North East LEP Area Fund of Funds programme include: Fund 3 — Growth Capital Fund — designed to accommodate the needs of post revenue businesses via small loans, later-stage mezzanine and equity finance. It is anticipated that the Fund would invest up to the 100 000 GBP to 300 000 GBP level. Fund 4 — Development Capital Fund — intended to support businesses in the more mature stages of development that require significant investment mezzanine, debt or equity) up to 2 000 000 GBP. Call-off Under the North East LEP Area Fund of Funds Programme it is anticipated that there will be 2-3 call-offs under Lot 2. Call-offs will be achieved through mini-competitions between the panel members for the relevant Lot. The duration of such call-offs is likely to be for the life of the Fund (i.e. approximately 10 years but extendable by up to 4 years, i.e. to 14 years in total). It is not possible at this stage to predict the number and duration of call-offs by Participating Authorities outside of the North East LEP Area Fund of Funds Programme.

2)Common procurement vocabulary (CPV)

66122000, 66130000

3)Quantity or scope

Circa 40 % of the total North East LEP Area of funds programme.

4)Indication about different date for duration of contract or starting/completion

Duration in months: 0 (from the award of the contract)
5)Additional information about lots

Lot No: 3 Lot title: Small Loan Funds

1)Short description

Funds for which contracts will be awarded under Lot 3 will address the demand from SMEs seeking smaller amounts of debt finance. The services which will be required under Lot 3 are likely to include: — Ability to work with a wide range of organisations and business support and professional services sector intermediaries in order to support the start-up and / or growth of companies (depending on the specific focus of the small loan fund ‘called-off’ at mini-competition stage). — Invest in all eligible business sectors in accordance with Contracting Authority / Participating Authority requirements and EC State aid regulation eligibility rules. Both Lot 1 and Lot 2 will require Fund Managers to use a variety of financial instruments and have the ability to deploy debt, mezzanine and equity finance successfully; Lot 3 requires a focus on the provision of smaller amounts of debt finance. — Operating fund(s) in accordance with the terms of the Limited Partnership Agreement entered into with the Contracting Authority / Participating Authority and with the agreed Fund Management Agreement. — Concluding loans of up to 150 000 GBP (in accordance with the investment policy of the individual investment fund, as determined by the Contracting Authority / Participating Authority and set out in the Fund Management Agreement), in eligible SMEs located in the North East LEP area. — Identifying SMEs which are eligible for investment in accordance with the rules of the fund, conducting appropriate commercial and technical due diligence and structuring deals. — Generating deal flow and working with investee companies in the North East LEP area (as defined by the Contracting Authority /Participating Authority) before and after concluding investments. — Conducting technical and commercial due diligence on and making investments in companies operating across multiple sectors and with diverse business models. — Addressing how investments and impact will be achieved sub-regionally in order to ensure each area (more developed and transitional) maximises its allocation. — Ensuring that services are delivered across all parts of the North East LEP area in a manner which stimulates enquiries and applications from SMEs based in all parts of the area served by the relevant fund, and all sub-regional targets included in the Fund Management Agreement. — Managing the fund(s) so that it / (they) meets or exceeds the output targets specified in the Fund Management Agreement, which will relate to outputs such as: investing the full amount of capital committed; investing in a target number of SMEs; supporting a specified number of enterprises; achieving a specified average investment size; creating or safeguarding jobs within investee SMEs, etc. — Managing the investment portfolio to add value to investee companies and achieve profitable exits for the fund(s). — Managing the investment fund(s) so as to maximise the returns to the investors/legacy fund while minimising the operational costs and the costs to investee companies. — Performing all necessary finance and accounting functions for the fund (as appropriate to the legal structure of the fund), including keeping proper accounting records, preparing accounts, preparing valuations of individual investments and of the fund portfolio as a whole. — Performing administrative functions on behalf of the fund(s) as appropriate to the legal structure of the fund including, for example, the services of the general partner of a limited partnership; representing the fund/partnership in engaging agents, solicitors, accountants, custodians, consultants, etc. — Monitoring the investment portfolio and providing regular reports on investment activity, fund performance and related outputs to the Contracting Authority / Participating Authority. In addition to the typical investment fund performance reporting requirements (financial metrics), the appointed Fund Managers will be required to monitor and report on a variety of additional ‘economic growth return’ metrics / outputs required by investors (e.g. jobs created, enterprise supported and new companies created, etc.) which will be agreed with the Contracting Authority / Participating Authority. — Operating the Funds at all times in accordance with all relevant EC State Aid regulations and any guidance given by the Contracting Authority in relation to this. — Fund managers will be required to follow all guidance given by the Contracting Authority as it relates to the branding of the individual sub-Funds. This may include the utilisation of a ‘common brand’ across all of the North East Fund of Fund sub-funds. — Marketing the investment fund to the appropriate market sectors and professional services intermediaries, in accordance with any directions or procedures stipulated in the Fund Management Agreement. — Maintaining and exploiting networks in relevant investment communities, in particular the venture capital investment/fund manager community; maintaining networks in financial markets and with entrepreneurs, investors and professional intermediaries. — Maintaining complete and accurate records in relation to the activities of the fund and retaining them for the prescribed period in accordance with the detailed requirements which will be specified in the Contract. An example of the small loan fund which may be procured under the North East Fund of Fund programme is: Fund 5 — Small Loan Fund — designed to accommodate the needs of mostly existing SMEs seeking loans up to 100 000 GBP. Call-off Under the North East LEP area Fund of Fund Programme it is anticipated that there will be 1 call-off under Lot 3. Call-offs will be achieved through mini-competitions between the panel members for the relevant Lot. The duration of such call-off is likely to be for the life of the Fund (i.e. approximately 10 years but extendable by up to 4 years, i.e. to 14 years in total). It is not possible at this stage to predict the number and duration of call-offs by Participating Authorities outside of the North East LEP Area Fund of Funds Programme.

2)Common procurement vocabulary (CPV)

66122000, 66000000, 48812000

3)Quantity or scope

4)Indication about different date for duration of contract or starting/completion

Duration in months: 0 (from the award of the contract)
5)Additional information about lots

Section III: Legal, economic, financial and technical information

III.1)Conditions relating to the contract

III.1.1)Deposits and guarantees required:

The Contracting Authority and/or the Participating Authorities reserve the right to require as they deem appropriate deposits and/or guarantees and/or bonds and/or another form of security. Details will be provided in the contract documents.

III.1.2)Main financing conditions and payment arrangements and/or reference to the relevant provisions governing them:

Details are set out in the Pre-Qualification Questionnaire Instructions and Evaluation, the Pre- Qualification Questionnaire and the other tender documents.

III.1.3)Legal form to be taken by the group of economic operators to whom the contract is to be awarded:

The Contracting Authority and/or the Participating Authority reserve the right to require groupings of service providers to take a particular legal form or to require a single provider to take primary liability or to require each party to undertake joint and several liability (where relevant). Where a consortium or sub-contracting approach is proposed, you will be required to provide all information in respect of the relationship and roles between the parties and identify the proportion of the work to be delivered by the parties named.

III.1.4)Other particular conditions

The performance of the contract is subject to particular conditions: yes
Description of particular conditions: Drafts of the Framework Agreement, the Limited Partnership Agreement and the Fund Management Agreement are available via the procurement portal NEPO Portal The Framework Agreement sets out the terms of the Framework. It includes specific provisions with regard to complying with the requirements of the holding fund investors. It includes the fund management fees applicable to contract types/values — or mechanisms for determining them. It also includes obligations in relation to ensuring compliance with state aid regulations and to managing conflicts of interest and undertakings in relation to complying with the investment policies and monitoring and reporting obligations which are set out in detail in Fund Management Agreement. All economic operators are required to be accredited by the Financial Conduct Authority prior to delivering services under the terms of the Framework. Service providers may be asked to actively participate in the achievement of social and/or environmental policy objectives. Accordingly, contract performance conditions in particular may relate to social and/or environmental considerations. The Contracting Authority and / or Participating Authorities may hold a bidder information event during the PQQ stage of the procurement process. Details of any event will be made available via the procurement portal (insert details). Further details of the above and of other particular conditions are set out in the tender documents.
III.2)Conditions for participation

III.2.1)Personal situation of economic operators, including requirements relating to enrolment on professional or trade registers

Information and formalities necessary for evaluating if the requirements are met: The Contracting Authority is using the NEPO Portal to facilitate this procurement. The tender documents can be accessed once suppliers have completed the registration requirements and created a user-name and password.
Supplier Instructions: How to Express Interest in this Tender:
In accordance with articles (56 to 69) of Directive 2014/24/EU of the European Parliament and of the Council and Regulations (56 to 69) of the Public Contracts Regulations 2015 and as set out in the invitation to tender documents available from (portal/data room). Applicants will be assessed in accordance with Chapter 2, Section 5 of the Public Contracts Regulations 2015, on the basis of the information provided in the response to the tender documentation.

III.2.2)Economic and financial ability

Information and formalities necessary for evaluating if the requirements are met: In accordance with Article (58) of Directive 2014/24/EU of the European Parliament and of the Council and Regulation (58) of the Public Contracts Regulations 2015 and as set out in the tender documentation which is available from NEPO portal.
Minimum level(s) of standards possibly required: As set out in the Pre-Qualification Questionnaire.

III.2.3)Technical capacity

Information and formalities necessary for evaluating if the requirements are met:
In accordance with Article (58) of Directive 2014/24/EU of the European Parliament and of the Council and Regulation (58) of the Public Contracts Regulations 2015 and as set out in the tender documentation which is available from NEPO portal.
Minimum level(s) of standards possibly required:
As set out in the Pre-Qualification Questionnaire. All economic operators will be required to have appropriate authorisation from and be accredited by the Financial Conduct Authority prior to delivering services under the terms of the framework.
III.2.4)Information about reserved contracts
III.3)Conditions specific to services contracts

III.3.1)Information about a particular profession

Execution of the service is reserved to a particular profession: yes
Reference to the relevant law, regulation or administrative provision: Financial Conduct Authority Accreditation.

III.3.2)Staff responsible for the execution of the service

Legal persons should indicate the names and professional qualifications of the staff responsible for the execution of the service: no

Section IV: Procedure

IV.1)Type of procedure

IV.1.1)Type of procedure

Negotiated
Some candidates have already been selected (if appropriate under certain types of negotiated procedures) no
IV.1.2)Limitations on the number of operators who will be invited to tender or to participate

IV.1.3)Reduction of the number of operators during the negotiation or dialogue

Recourse to staged procedure to gradually reduce the number of solutions to be discussed or tenders to be negotiated yes
IV.2)Award criteria

IV.2.1)Award criteria

The most economically advantageous tender in terms of the criteria stated in the specifications, in the invitation to tender or to negotiate or in the descriptive document

IV.2.2)Information about electronic auction

An electronic auction will be used: no
IV.3)Administrative information

IV.3.1)File reference number attributed by the contracting authority:

1404
IV.3.2)Previous publication(s) concerning the same contract

IV.3.3)Conditions for obtaining specifications and additional documents or descriptive document

Time limit for receipt of requests for documents or for accessing documents: 30.6.2016 – 12:00
Payable documents: no

IV.3.4)Time limit for receipt of tenders or requests to participate

30.6.2016 – 12:00
IV.3.5)Date of dispatch of invitations to tender or to participate to selected candidates

IV.3.6)Language(s) in which tenders or requests to participate may be drawn up

English.
IV.3.7)Minimum time frame during which the tenderer must maintain the tender

IV.3.8)Conditions for opening of tenders

Persons authorised to be present at the opening of tenders: no

Section VI: Complementary information

VI.1)Information about recurrence

This is a recurrent procurement: no

VI.2)Information about European Union funds

The contract is related to a project and/or programme financed by European Union funds: yes
Reference to project(s) and/or programme(s): The UK Government and European Union (EU) are supportive of using Financial Instruments as public policy measures to address market failure and stimulate business growth, job creation and technology development on a sustainable basis.

VI.3)Additional information

As set out in the Pre Qualification Questionnaire (PQQ) Instructions and Evaluation, the Framework may be used by Contracting or Participating Authorities to call-off fund management services. The North East Combined Authority (NECA) is the contracting authority for the 1st stage of this procurement process (up to the appointment of the Framework Panel). The Framework Agreements will therefore be between the panel members and NECA. The Contracting Authority may subsequently allow 1 or more other Participating Authorities to access the concluded Framework Agreement, without creating any obligation on any of them to do so. In that event, the contractual relationship for any resulting Contract would be between the approved individual body accessing the Framework Agreement and the successful Panel Member. The following Participating Authorities will be able to access the Framework Agreement: a) The North East LEP Area Fund of Funds Implementing Body; b) The North East Local Enterprise Partnership; c) The North East Combined Authority; d) Newcastle City Council; e) Sunderland City Council; f) Gateshead Council; g) North Tyneside Council; h) South Tyneside Council; i) Durham County Council; j) Northumberland County Council; k) North East Finance Limited; l) North East Access to Finance Limited; m) Business Durham; n) any Regional or Sub-Regional partnerships in respect of which any of the Councils named above is the responsible body, whether such body exists at the date the Framework Agreement is signed or is created during the term of the Framework; o) any wholly owned subsidiary and or/any company, organisation or other special purpose vehicle which any body listed in this definition has an ownership interest in or otherwise participates in, whether such body exists at the date the Framework Agreement is signed or is created during the term of the Framework; p) any unincorporated body, group, committee or other similar organisation which any body listed in this definition participates in or is accountable for, whether such body exists at the date the Framework Agreement is signed or is created during the term of the Framework. Participating Authority means each of those organisations who, in addition to the Contracting Authority, shall be entitled to use the Framework Agreement to call off the services of those Suppliers who are ultimately appointed to the panels created under Lot 1 and Lot 2. These organisations are: — Newcastle City Council, Civic Centre, Newcastle upon Tyne, NE1 8QH; — Sunderland City Council, PO Box 100, Civic Centre, Sunderland, SR2 7DN; — Gateshead Council, Civic Centre, Regent Terrace, Gateshead, Tyne and Wear, NE8 1HH; North Tyneside Council, Quadrant, The Silverlink North, Cobalt Business Park, North Tyneside, NE27 0BY; — South Tyneside Council, Town Hall and Civic Offices, Westoe Road, South Shields, Tyne and Wear, NE33 2RL; — Durham County Council, County Hall, Durham, County Durham, DH1 5UQ; — Northumberland County Council, County Hall, Morpeth, Northumberland, NE61 2EF; — The Implementing Body; — North East Finance Limited, 1stFloor, 33 Grey Street, Newcastle upon Tyne, Tyne and Wear, NE1 6EE; — The North East Local Enterprise Partnership, 1 St James Gate, Newcastle upon Tyne, NE1 4AD; — any Regional or Sub-Regional partnerships in respect of which any of the Councils named above is the responsible body, whether such body exists at the date the Framework Agreement is signed or is created during the term of the Framework; — any wholly owned subsidiary and or/any company, organisation or other special purpose vehicle which any body listed in this definition has an ownership interest in or otherwise participates in, whether such body exists at the date the Framework Agreement is signed or is created during the term of the Framework; — any unincorporated body, group, committee or other similar organisation which any body listed in this definition participates in or is accountable for, whether such body exists at the date the Framework Agreement is signed or is created during the term of the Framework. In addition the Contracting Authority and/or the Participating Authorities may novate this contract/framework to 1 of their wholly owned subsidiaries and/or any company, organisation or other Special Purpose Vehicles which the Contracting Authority and/or the Participating Authorities have an ownership interest in or otherwise participate in. Portal/Data Room. The Contracting Authority and other Participating Authorities utilising the framework reserve the right to use any electronic portal during the life of the agreement. Please go to (portal/data room) to register and download the documents. Social Value: Under this procurement, organisations are required to participate actively in the economic and social regeneration of the locality of, and surroundings of, the place of delivery for the procurement. Contract performance conditions may therefore relate in particular to economic regeneration considerations. Publishing Potential suppliers should note that, in accordance with the UK Government’s policies on transparency. Contracting Authorities and the Participating Authorities may publish the Pre-Qualification Questionnaire, the Invitation to Negotiate and the Invitation to Submit Final Tender documents and the text of any framework agreement, subject to possible redactions at the discretion of the Contracting Authorities. The terms of the proposed framework agreement will also include provisions to permit the Contracting Authority and the Participating Authorities awarding a contract under the framework agreement, to publish the text of that contract, subject to possible redactions at the discretion of the Contracting Authority and the Participating Authorities. Contracts Finder Regulation 106 of the Public Contracts Regulations 2015 requires that where a contracting authority sends a contract notice to the EU Publications Office for publication, the contracting authority shall cause information to be published on Contracts Finder (https://www.gov.uk/contracts-finder) within the relevant time period as set out in Regulation 106. The resulting contract award notice will also be published on Contracts Finder within the relevant time period pursuant to Regulation 108. Other Matters/Reservation of Rights by the Contracting Authority and/or the Participating Authorities. The Contracting Authority and/or the Participating Authorities expressly reserve the right: (1) Not to award any contract as a result of the procurement process commenced by publication of this notice; (2) To make whatever changes they may see fit to the content and structure of the tendering competition; and in no circumstances will the Contracting Authority and/or the Participating Authorities be liable for any costs, fees, damages and expenses incurred by the candidates in this procurement process or otherwise. The Contracting Authority and/or the Participating Authorities do not bind themselves to accept any tender and withhold the right to appoint outside any contract should it be considered to be in the best interest of the Contracting Authority and/or the Participating Authorities. Compliance with all legislation is required, both in the contract award procedure and during the term of the contract/framework. If the Contracting Authority and/or the Participating Authorities decide to enter into a framework agreement with a successful supplier, this does not mean that there is any guarantee of subsequent contracts being awarded. Any expenditure, work or effort undertaken prior to contract award is accordingly a matter solely for the commercial judgment of potential suppliers. Bidders bid at their own risk. Any orders placed under this framework agreement will form a separate contract under the scope of this framework between the supplier and the specific requesting other contracting body. Participants should note that there will be no guaranteed volumes under any framework agreement awarded.

VI.4)Procedures for appeal
VI.4.1)Body responsible for appeal procedures
VI.4.2)Lodging of appeals
VI.4.3)Service from which information about the lodging of appeals may be obtained

VI.5)Date of dispatch of this notice:

24.5.2016

 

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