The North West Fund has had its budget for investing in companies with potential for growth reduced by another £15m for spending too slowly.
European funding managers have reduced the North West Fund for Development Capital fund, one of six sub-funds in the North West Fund, by one third from £45m to £30m.
The latest measure means that more than 15% of the overall fund's value has been trimmed since its inception. The fund started in 2010 with £185m and now has a pot of £155m.
The development capital fund makes investments of between £100,000 and £2m. The sub-fund had invested £5m of its initial £45m budget.
A spokesman for the North West Fund said £30m is a "more appropriate amount for the Development Capital Fund than £45m."
Last week, YFM Equity Partners, the manager of the development capital fund, said it was withdrawing from the role as part of a restructuring of its regional operation. A new fund manager is due to be appointed by the end of the year.
The North West Fund has until the end of 2015 to allocate all of its cash, which is provided jointly by a loan from the European Investment Bank and grant aid from the European Regional Development Fund's North West programme.
The fund's trustees are in the process of appointing a non-executive chairman on £25,000 and a new chief executive, on around £80,000, to replace Andy Leach who left in the summer.
The NWF has rewritten its business plan and tightened up procedures to accelerate spending following criticism from the local ERDF monitoring committee .
The deadline for applications for the chairman and chief executive positions is Friday 23 November. Berwick Partners is handling the recruitment search.