The City Pub EIS Fund has generated £5.5m in its latest round of fundraising and is eyeing growth through key hubs, MCA has learnt.

The group currently operates seven pubs and has also exchanged on a site in Warwick.

Chairman Clive Watson told MCA that it was important that the fund did not compete with the more established City Pub Company’s growth plans.

He said this was made easier by the fact that under new EIS rules the money raised in this round can only be used to buy closed pubs or non-licensed sites. He also said that the fund – which is run by Peter McDonald and James Watson – would avoid areas City Pub Co was targeting.

However, he stressed that the strategy of grouping sites around key hubs would be shared.

He said: “It’s something we’re already doing although obviously we are a smaller estate that City East and West. There are all sorts of benefits to doubling up in areas where we can.

“We are constantly looking at things but we are only allowed to go for certain types of building. That means you have to be creative and it also means there’s a significant cost to bringing these sites on line.”

Watson ultimately hopes to raise £15m for expansion in this second round of EIS fundraising.