On the go: The Department for Business, Energy and Industrial Strategy is seeking to attract pension fund investment to a “clean growth” venture capital fund it has seeded with CCLA Investment Management.
Both BEIS and CCLA will put £20m each into the fund, which will invest in companies “pioneering carbon emission reductions in the areas of power and energy, buildings, transport and waste”.
But managers hope to grow the fund to £100m of client assets, seeking capital from pension funds, limited partner investors and family offices.
Business secretary Alok Sharma said: “The need for innovative and ambitious ideas across green industries has never been greater. I am pleased that with the help of this fund, promising clean growth start-ups will be able to step up to accelerate the UK’s recovery, while supporting our path to net zero by 2050.
This pioneering new fund will enable innovative low-carbon solutions to be scaled up at speed, helping to drive a green and resilient economic recovery.”
Pensions have been a key target for the government in its drive to ensure funding for patient capital, particularly in green industries and pioneering technologies.
The Department for Work and Pensions explored the possibility of changing the methodology for calculating the charge cap on defined contribution default funds in October 2019, on the back of a recommendation from the British Business Bank.
The BBB suggested that average returns for young savers could be increased by as much as 7-12 per cent with a small allocation to venture capital. However, experts have previously said that fees, risk and complexity mean the asset class can only play a minor role in most DC portfolios.
