UK pension giants join forces to unlock £1bn to back Britain’s…

A consortium of some of the UK’s largest pension providers, today (Monday 27 July) announce their commitment to explore the establishment of a first-of-its-kind vehicle dedicated to investing in scaling UK businesses. The ambition is a fund of sufficient scale to target the best opportunities born out of UK innovation in science and technology.

The fund would seek to deliver strong long-term returns for pension providers and their members by investing in successful UK companies. By helping innovative businesses scale up, commercialise new technologies and create skilled jobs, it would support economic growth while helping pension savers benefit from larger retirement pots and stronger local economies.

By bringing together major pension investors, the UK Scale-up Fund would help connect institutional capital with the companies, founders and venture managers driving the next wave of British innovation.

As part of this initiative the British Business Bank is working alongside the pension providers to support the launch of the fund and with the intention of investing in partnership with the group. The Office for Investment is also supporting the consortium as it explores the development of the fund.

Prime Minister Andy Burnham said:

Today sends a clear message: this is a vote of confidence in British business, British talent and British ambition.

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 said:

Britain leads the way in science, technology and innovation, and we want to ensure more of our most promising businesses can start, scale and succeed here in the UK.

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.

Our message is clear. Britain is open for business, open to investment and determined to put science, technology and innovation at the heart of our economic future.

Chancellor of the Exchequer John Healey said:

We create great companies in Britain but don’t do enough to grow them with British capital and keep profits in the UK. I want the UK to become the best place in the world both to start and scale a business, with investment, jobs and skills in every region.

We have the third largest Venture Capital market in the world and this new £1 billion fund will mean more British money to back British scale-ups and better returns for pension savers.

Andy Bord, Railpen’s Chief Executive Officer, said:

Our priority is always to deliver strong long-term outcomes for our members. The UK is a dynamic powerhouse of innovation. The UK Scale-up Fund represents a compelling investment opportunity where disciplined, patient capital can help growing companies scale, provide attractive returns for pension savers and generate lasting economic growth. We are pleased to have helped shape this initiative, which will play a vital role in supporting ambitious companies with global reach to build their future here in the UK, creating a stronger economy for our members to retire into.

Ian Cornelius, Nest’s Chief Executive Officer, said:

The UK is home to many innovative, high-growth businesses and has a strong track record of nurturing world-leading science and technology companies, with many of today’s global success stories founded here.

As a long-term investor on behalf of more than 14 million members, Nest sees an important role for pension capital in helping successful UK businesses access the funding they need to grow. We believe there can be a strong alignment between delivering attractive long-term outcomes for members and supporting innovation, job creation and economic growth across the UK.

Chris Rule, Chief Executive Officer at LPPI, added:

The UK is a global hub for innovation and entrepreneurship, but it’s clear that many scaling businesses struggle to access the capital they need to reach their full potential. This cross-industry initiative will give pension funds the opportunity to generate sustainable, long-term returns whilst supporting the next generation of British success stories.

Collaboration will be central to the fund’s success. The evolution of the LGPS has shown the value of institutions working together to build scale and deliver better outcomes. We’re looking forward to bringing that experience to this initiative, alongside other leading investors, to strengthen the UK’s scale-up funding ecosystem.

Richard Law-Deeks, Chief Executive Officer, LGPS Central said:

The UK is home to some outstanding businesses and entrepreneurs. We welcome the opportunity to explore whether the UK Scale-Up Fund can provide a practical route for long-term LGPS capital to support their growth whilst delivering attractive risk-adjusted returns for Partner Funds and members.

We invest on behalf of millions of scheme members, and every investment decision starts with our responsibility to deliver strong long-term outcomes for them. The proposed fund could help bring together institutional investors at scale and improve access to opportunities that may otherwise be difficult to achieve individually.

Rachel Elwell, Chief Executive Officer at Border to Coast, said:

We’re proud to be part of this collaboration to support and scale more of our brilliant home-grown innovative businesses. Through our own UK Opportunities strategy we see the role pension capital can play in backing high-quality UK investment opportunities. By combining scale, collaboration, investment discipline, and a strong pipeline of high-quality opportunities, this initiative can help deliver attractive long-term outcomes for pension savers while enabling more innovative UK businesses to grow and compete.

Leandros Kalisperas, Chief Investment Officer, British Business Bank, said:

Today’s announcement is an important milestone in strengthening the UK’s capital formation ecosystem. By bringing together long-term pension capital with the UK’s most ambitious growth businesses, we have the opportunity to create a virtuous cycle—supporting innovation, attracting further private investment, and delivering strong long-term outcomes for pension savers.

Notes

• The pension providers represent defined contribution, defined benefit and Local Government Pension Scheme funds.
• A process of market engagement to explore appointment of a manager for the proposed vehicle will begin shortly.
• Asset managers should contact the British Business Bank to express interest. Contact: capitalformation@british-business-bank.co.uk

SOURCE: GOV