Key Takeaways
- • Schroders Capital's UK Innovation long-term asset fund (LTAF) has surpassed £100m in deployed capital across 19 investments, with the London Borough of Lambeth Pension Fund among local government pension schemes committing over £68m since first close in September 2024.
- • The LTAF structure, launched as one of the UK's first venture capital vehicles of its kind, enables defined contribution pension schemes and institutional investors to access early-stage UK companies through direct investments and primary and secondary commitments to venture managers.
- • Portfolio spans high-growth sectors including artificial intelligence (Eleven Labs, Wayve, Synthesia, Luminance), fintech, and life sciences, with clinical-stage biotech investments in gene therapies, neuropsychiatry, and cancer therapeutics.
- • UK government backing through Enterprise Management Incentives (EMI), Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCT) expansion, effective April 6, 2026, is projected to unlock an additional £100m annually in venture investment through doubled tax relief ceilings.
- • The fund raised £500m at first close with backing from the British Business Bank and Future Growth Capital (a Schroders-Standard Life joint venture), representing a significant institutional capital allocation shift toward UK early-stage innovation.
Summary
Schroders Capital has achieved a significant milestone in democratizing venture capital access for pension funds, with its UK Innovation long-term asset fund (LTAF) deploying over £100m across 19 investments. The vehicle, launched in September 2024 as one of the UK's first LTAF structures targeting venture capital, has attracted substantial institutional backing including commitments from local government pension schemes totaling over £68m. The London Borough of Lambeth Pension Fund's commitment represents a key endorsement of the strategy among municipal pension allocators seeking exposure to early-stage UK innovation.
The LTAF structure addresses a structural gap in pension fund access to venture markets by combining direct investments with primary and secondary commitments to venture managers. The fund raised £500m at first close with backing from the British Business Bank and Future Growth Capital, a joint venture between Schroders and Standard Life. According to Harry Raikes, head of UK venture investments at Schroders Capital, the "strength and depth of our partner network enables unique access to the best founders and funds," positioning the vehicle to capture outsized returns while supporting high-impact innovation across critical sectors.
The portfolio construction reflects exposure to secular growth themes. Technology and software investments include Eleven Labs (AI research), Wayve (autonomous driving), Synthesia (AI video communication), and Luminance (legal AI). Life sciences allocations span clinical-stage biopharmaceuticals including AAVantgarde Bio (gene therapies for inherited retinal diseases), Draig Therapeutics (neuropsychiatry), Artios Pharma (cancer therapeutics), and Kinaset Therapeutics (respiratory disease). These 12 company investments across seven venture capital manager relationships demonstrate diversification across both sectors and fund manager relationships.
Government policy support strengthened the funding landscape effective April 6, 2026, when tax relief expansions took effect. Chancellor Rachel Reeves announced measures doubling the investment caps for the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT), alongside significant expansion of the Enterprise Management Incentives (EMI) scheme. These changes, introduced at Budget 2025, are projected to unlock approximately £100m in additional annual investment through enhanced tax incentives for private investors backing early-stage companies. The combined effect—institutional capital via vehicles like Schroders' LTAF alongside expanded tax-advantaged retail investor mechanisms—aims to meaningfully scale UK venture funding at a critical moment for portfolio companies navigating capital-intensive growth phases.
The LTAF structure addresses a structural gap in pension fund access to venture markets by combining direct investments with primary and secondary commitments to venture managers. The fund raised £500m at first close with backing from the British Business Bank and Future Growth Capital, a joint venture between Schroders and Standard Life. According to Harry Raikes, head of UK venture investments at Schroders Capital, the "strength and depth of our partner network enables unique access to the best founders and funds," positioning the vehicle to capture outsized returns while supporting high-impact innovation across critical sectors.
The portfolio construction reflects exposure to secular growth themes. Technology and software investments include Eleven Labs (AI research), Wayve (autonomous driving), Synthesia (AI video communication), and Luminance (legal AI). Life sciences allocations span clinical-stage biopharmaceuticals including AAVantgarde Bio (gene therapies for inherited retinal diseases), Draig Therapeutics (neuropsychiatry), Artios Pharma (cancer therapeutics), and Kinaset Therapeutics (respiratory disease). These 12 company investments across seven venture capital manager relationships demonstrate diversification across both sectors and fund manager relationships.
Government policy support strengthened the funding landscape effective April 6, 2026, when tax relief expansions took effect. Chancellor Rachel Reeves announced measures doubling the investment caps for the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT), alongside significant expansion of the Enterprise Management Incentives (EMI) scheme. These changes, introduced at Budget 2025, are projected to unlock approximately £100m in additional annual investment through enhanced tax incentives for private investors backing early-stage companies. The combined effect—institutional capital via vehicles like Schroders' LTAF alongside expanded tax-advantaged retail investor mechanisms—aims to meaningfully scale UK venture funding at a critical moment for portfolio companies navigating capital-intensive growth phases.
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