GLE Group, the small business and property investor owned by London’s 33 local authorities, has expanded northwards by acquiring the YFM Group, the Yorkshire-based venture capital and buy-out company, from its management. Financial Times

The deal will create one of the UK’s biggest early-stage investors, with £330m under management.

It is a boost for Britain’s fragile venture capital industry, which has been hit by the recent exit of several big investors, such as 3i and Apax Partners.

GLE and YFM were founded by the London and Yorkshire local authorities respectively in 1982 to address the problem of de-industrialisation by financing economic development and backing entrepreneurs.

YFM, which has nine offices from Leeds and Hull to Bristol and Plymouth, manages £300m of funds for institutional and retail clients. It invests up to £8m in 75-100 companies a year, through buy-outs, venture capital and start-up loans.