Key Takeaways
- • A consortium of UK pension providers, including Railpen, Nest, Local Pensions Partnership Investments (LPPI), LGPS Central and Border to Coast, has committed to exploring a UK Scale-up Fund worth more than £1bn to invest in high-growth British science and technology companies.
- • The British Business Bank is working alongside the consortium on the fund's development and intends to invest in partnership with the group, while the Office for Investment is supporting the structuring and establishment of the vehicle.
- • The proposed fund aims to increase domestic growth capital and give pension scheme members greater access to returns from successful UK businesses, targeting companies seeking funding to scale, commercialise new technologies and create skilled jobs.
- • UK Private Capital chief executive Michael Moore welcomed the initiative but urged more defined contribution schemes to increase allocations to venture and growth capital.
Summary
A consortium of major UK pension providers has committed to exploring the establishment of a new UK Scale-up Fund worth more than £1bn, targeting high-growth British science and technology companies. The consortium comprises Railpen, Nest, LPPI, LGPS Central and Border to Coast. The proposed vehicle would seek to increase the supply of domestic growth capital and give pension scheme members greater access to potential returns from successful UK businesses, with a focus on companies seeking funding to scale, commercialise new technologies and create skilled jobs across the country.
The British Business Bank is working alongside the pension providers to support the development and launch of the fund and intends to invest in partnership with the group. The Office for Investment is also supporting the consortium as it explores the structure of the vehicle. According to the source, the group aims to connect institutional pension capital with UK companies, founders and venture managers operating in science and technology. By pooling capital from several large pension investors, the initiative is intended to create a vehicle of sufficient scale to access leading investment opportunities emerging from UK innovation. The consortium argues the approach could deliver attractive long-term returns for members while keeping companies in the UK.
Prime Minister Andy Burnham described the proposed fund as a vote of confidence in British businesses and workers, saying it would help connect pension investment with the entrepreneurs and technologies that will reindustrialise Britain. Chancellor of the Exchequer John Healey said the UK needed to improve its record of supporting domestic companies beyond their early stages, arguing that Britain creates great companies but does not do enough to grow them with British capital and keep profits in the UK.
Railpen chief executive Andy Bord said the fund represents a compelling opportunity for disciplined, patient capital to help growing companies scale. Nest chief executive Ian Cornelius, whose organisation serves more than 14 million members, said there is strong potential alignment between pension investment, member outcomes and economic growth. LPPI chief executive Chris Rule said collaboration would be central to the fund's success, citing the experience of Local Government Pension Scheme investors in building scale through collective investment. LGPS Central chief executive Richard Law-Deeks and Border to Coast chief executive Rachel Elwell also backed the initiative. British Business Bank chief investment officer Leandros Kalisperas called it an important step in strengthening the UK's capital formation ecosystem.
Michael Moore of UK Private Capital welcomed the announcement but said pension capital needed to reach specialist venture and growth managers with the expertise and track records required to identify and support successful businesses, and urged more defined contribution schemes to increase their allocations to venture and growth capital.
The British Business Bank is working alongside the pension providers to support the development and launch of the fund and intends to invest in partnership with the group. The Office for Investment is also supporting the consortium as it explores the structure of the vehicle. According to the source, the group aims to connect institutional pension capital with UK companies, founders and venture managers operating in science and technology. By pooling capital from several large pension investors, the initiative is intended to create a vehicle of sufficient scale to access leading investment opportunities emerging from UK innovation. The consortium argues the approach could deliver attractive long-term returns for members while keeping companies in the UK.
Prime Minister Andy Burnham described the proposed fund as a vote of confidence in British businesses and workers, saying it would help connect pension investment with the entrepreneurs and technologies that will reindustrialise Britain. Chancellor of the Exchequer John Healey said the UK needed to improve its record of supporting domestic companies beyond their early stages, arguing that Britain creates great companies but does not do enough to grow them with British capital and keep profits in the UK.
Railpen chief executive Andy Bord said the fund represents a compelling opportunity for disciplined, patient capital to help growing companies scale. Nest chief executive Ian Cornelius, whose organisation serves more than 14 million members, said there is strong potential alignment between pension investment, member outcomes and economic growth. LPPI chief executive Chris Rule said collaboration would be central to the fund's success, citing the experience of Local Government Pension Scheme investors in building scale through collective investment. LGPS Central chief executive Richard Law-Deeks and Border to Coast chief executive Rachel Elwell also backed the initiative. British Business Bank chief investment officer Leandros Kalisperas called it an important step in strengthening the UK's capital formation ecosystem.
Michael Moore of UK Private Capital welcomed the announcement but said pension capital needed to reach specialist venture and growth managers with the expertise and track records required to identify and support successful businesses, and urged more defined contribution schemes to increase their allocations to venture and growth capital.
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