NatWest Cushon, Aegon and M&G have confirmed their cornerstone investments for the British Growth Partnership, a new initiative targeting investment in high-growth UK companies.
The British Business Bank has today (20 November) confirmed that the three institutional investors have allocated to the first fund launched by the British Growth Partnership. The fund is targeting £200m for its first round of fundraising, which will close at the end of the current financial year.
The investments are subject to “final terms and relevant approvals”, the British Business Bank said in a statement.
“This news demonstrates the appetite across the full spectrum of pension funds to increase allocations to UK venture capital.”
Louis Taylor, British Business Bank
It is also working with London CIV, the asset pool for the capital’s 32 local authority pension schemes, with a view to investing in the British Growth Partnership Fund I.
‘A vital step forward’ for UK investment
Louis Taylor, the bank’s chief executive officer, said: “Today’s announcement brings us one step closer to mobilising institutional capital at scale into the UK’s fastest growing companies, both diversifying pension portfolios and providing much-needed scale-up funding.
“The British Growth Partnership will provide access to the bank’s live pipeline of scale-up businesses, providing a vital bridge between institutional investors and the UK’s thriving venture capital sector. We are making strong progress with our initial fund, and this news demonstrates the appetite across the full spectrum of pension funds to increase allocations to UK venture capital.”
The £3.3bn NatWest Cushon master trust was confirmed as an interested party in the launch of the British Growth Partnership a year ago.
A spokesperson for the master trust said: “As a signatory to both the Mansion House Compact and Mansion House Accord, we’re committed to directing investment into innovative, high-growth UK businesses and impact-led sectors to deliver better outcomes for our pension savers while also supporting the UK’s growth ambitions.
“The British Growth Partnership is a vital step forward to unlocking these investment opportunities. The investment due diligence is complete, and we are excited to move forward, subject to trustee approval.”
“By attracting more investment, the British Business Bank is taking a major step to drive dynamic growth and strengthen the UK’s position as a leading hub for innovation.”
Alex Seddon, M&G
Alex Seddon, head of impact and private equity at M&G Investments, said: “Britain’s businesses need patient capital to truly scale. By attracting more investment, the British Business Bank is taking a major step to drive dynamic growth and strengthen the UK’s position as a leading hub for innovation.”
A spokesperson for Aegon UK said its involvement in the British Growth Partnership “aligns with our commitment to supporting the UK’s most innovative and high-growth companies, while delivering long-term value for our customers”.
Pension funds, venture capital, and the government’s drive for growth
Despite a big push from the government to encourage greater pension investment into UK alternatives, there seems to be little initial activity from pension funds in relation to venture capital investing, as Jon Yarker reports. Read the full article.
The British Growth Partnership’s approach
The British Business Bank has been given significant additional funding and resources by the government since last year’s election to facilitate more institutional investment in high-growth UK companies.
A year ago, it appointed West Yorkshire Pension Fund chief investment officer Leandros Kalisperas as its first CIO, tasked with sourcing and delivering investments for the new British Growth Partnership, as well as having oversight of the bank’s other investment activities.
BBB Investment Services, the bank’s third-party investment arm, was granted regulatory approval in May, paving the way for the launch of the first investment fund.
The British Business Bank said its inaugural fund would take a direct approach, co-investing alongside venture capital fund managers into “promising high-growth UK companies” across a range of sectors.
In connection with the impending first close, the British Business Bank also announced a partnership with Langham Hall to support the new fund with administration services.
Bank to launch VC consulting service
Meanwhile, the British Business Bank also announced that it intends to launch a “Venture Link” initiative for pension funds to improve transparency within the venture capital space for investors that are new to the asset class.
The bank also said the service would form part of “a package of measures” to assist pension schemes in boosting their investment capability for venture capital, as well as supporting investment strategies, and reducing barriers to new investment.
In a statement, the British Business Bank said it would consult with stakeholders on the design of this initiative.
