A consortium of UK pension providers is reportedly working on the launch of a new fund worth more than £1bn targeting innovative private British companies.
Referred to as the UK Scale-Up Fund, figures involved include Nest, Railpen and Boarder to Coast, as well as the British Business Bank, which would serve as both a backer of the fund and support on its delivery.
According to the government, the fund would be of “sufficient scale to target the best opportunities born out UK innovation in science and technology.
“Today sends a clear message: this is a vote of confidence in British business, British talent and British ambition,” said Prime Minister Andy Burnham.
“This new fund would help unlock good growth in every postcode, connecting pension investment with the entrepreneurs and technologies that will reindustrialise Britain and create the jobs of the future.
“That means more opportunities for working people, stronger returns for savers, and more businesses choosing to start, grow and stay in Britain.”
Business, Innovation, Science and Trade Secretary Jonathan Reynolds added: “The ambition of major pension providers to back the next generation of British success stories is an important vote of confidence in UK innovation. By investing in innovative UK companies, they can help drive long-term growth while helping pension savers share in their success.”
This fund would follow significant progress already made to direct pension capital towards high-growth potential private firms.
In April it was revealed that the British Business Bank was coordinating the British Growth Partnership Fund I, with an initial close of £200m, backed by three UK pension funds.
Talks associated with the new fund are said to be at an early stage.
“The new UK Scale Up Fund is a welcome signal that the government understands the urgency of getting more domestic capital mobilised into venture and growth capital to close the scale up gap,” commented Michael Moore, chief executive of UK Private Capital.
“Now we must build on this momentum. It is vital that more pension capital reaches specialist venture and growth funds, that have the expertise and track records to identify, back and scale the next generation of British success stories. We also need to see greater urgency from more DC schemes.”
