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Sigma completes successful switch to urban regeneration

Sigma Capital has completed its exit from investment management and netted early revenue from the urban regeneration activities which have seen its market value rocket by over 300% in the past year.

The Edinburgh-based group, which now styles itself Sigma, announced yesterday that it had banked proceeds from the sale of a village centre development which forms part of a 1000-acre regeneration plan for North Solihull in the West Midlands.

After repayment of an associated government loan and amounts due to the contractor, Sigma expects the net funds retained by the group to be in excess of £500,000, as it had previously indicated to investors.

The completed phase comprises a 30,000 sq ft two-storey commercial development, with 16,000 sq ft of office accommodation and eight retail units. "For this development, Sigma was responsible for obtaining planning permission and securing five key pre-lettings which generate 90% of the total income for the development, and securing the forward sale of the development.," the company said.

"In addition, Sigma procured the construction contract and finance for the build phase of the development, negotiating a £4m funding facility from the government's Growing Places Fund."

It added: "Sigma is also providing development management services on a further village centre in North Solihull where new infrastructure is being delivered, and is assessing the viability of further commercial development opportunities."

Graham Barnet, chief executive of Sigma, said he was delighted that its partnership with Solihull Metropolitan Borough Council continued to deliver the council's large-scale regeneration objectives for the area.

Mr Barnet said the group was also pleased to report that it had now fully exited its historic venture capital activities, with the transfer of the management of the fourth and last of the group's funds to Shackleton Finance, together with the business advisory contracts of certain of the investee companies.

The transfer of the management of Sigma's two university funds to a third party fund administrator had also been completed. Sigma continues to be a limited partner in all four venture funds and so retains its investment in the funds, but following the transfers Sigma no longer has any funds under management.

Created in 1996 as a technology investor, Sigma went on to invest in property partnerships and then green technology, before making a serious move into urban regeneration with the help of a deal with its then significant shareholder Sir Tom Hunter to buy a specialist partnership working with English councils

Sigma's shares jumped 60% last November when it unveiled a joint venture with Gatehouse, a shariah-compliant investment bank, for a proposed £700m development of up to 6,600 new private rented sector homes in partnership with local authorities in north-west England, sparking David Cameron's endorsement.

Earlier this year the group acquired its first London site at Barking, prompting similar praise from London Mayor Boris Johnson.

Sigma's original property management activities, centred on the major development at Winchburgh in West Lothian and City Wharf in Aberdeen, also delivered good results last year. The shares rose 2.5p to 83.5p.

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