The Strathclyde pension fund is behind an innovative £100mn "Dragons' Den-style scheme" aimed at helping out Scottish entrepreneurs, according to reports from the Scottish Daily Record

The local government scheme will be open to pitches from businesses in the region and, in a similar way to the popular TV show produced by BBC2, small firms can apply for cash in return for a share of their profits.

As the Daily Record reports, firms who succeed in winning the fund's backing will also be paired with expert mentors to help them expand.

Pension chiefs hope the pioneering scheme will earn a good return for their 200,000 members, boost the economy and create jobs in their area.

Talking to the paper, chairman of Strathclyde Pension Fund Paul Rooney said: "By making these funds available for appropriate investments, we can generate jobs. But there will have to be a return for the pension fund and for people's pensions. It's important the small firms we invest in have a clear business plan and meet the criteria we set."

According to data held by Pension Funds Online, the Strathclyde Pension Fund had over £10bn in assets at 31 December 2010 of which nearly half is invested in equities.

It is currently the biggest public sector pension fund in Scotland and the third largest in the UK.

The scheme will be set up in a way that all potential pitches from companies will have to be run by a panel of experts who come from organisations such as the Glasgow Chamber of Commerce and the Glasgow City Council (at which Rooney is a councilor and treasurer).

Only after their approval is granted will a contract be signed for loans or equity deals.

The pension fund will welcome applications for funding from firms looking to expand and willing to pay the "living wage" of £7.20 an hour.

Rooney said: "Small firms are the backbone of the economy but are not getting the funds they need from banks. We want to look at how we can use the sizeable power of pension investments more locally."

azeevalkink@wilmington.co.uk