Towergate has launched a new £70m capital fund to acquire brokers under £10m GWP.

Cullum Capital Ventures (CCV) will be dedicated to buying smaller UK brokers, though it will also help their managements to look at management buy-out (MBO) or management buy-in (MBI) opportunities.

Towergate executive chairman Peter Cullum, who was recently named Entrepeneur of the Year 2005, said: "As Towergate has grown, it is natural that it should focus increasingly on larger acquisitions.

"Today, under the strict regulatory rules, the due diligence process is as time-consuming and costly for a £5m acquisition as it is for a £50m acquisition."

He added: "There are, however, a considerable number of small, independently minded intermediaries whose principals seek to maintain their personal connections with their clients rather than be subsumed into the role of 'manager' in order to comply with the FSA regulatory regime, CFI and approved person status - typically without support."

Towergate executive director Tim Johnson will become chief executive of CCV.

He said: "Our experience is that many conventional lenders are not comfortable with the concept of providing loans against goodwill, and this often prevents young, ambitious teams from buying out their principals.

"We have the funding and knowledge to assist these individuals in realising those ambitions."

CCV finance director Roger Brown said: "We will be looking for brokers with between £1m and £10m GWP.

"We want our brokers to concentrate on doing what they do best - providing their clients with exemplary technical service and developing their staff. We are here to help with finance, IT and compliance support as well as product provision."

CCV will be a separate entity from Towergate, Brown added.