Scottish Widows has announced plans to invest workplace pension capital in British technology companies through a new venture growth portfolio.
Aberdeen Investments, which manages the growth sub-fund of the CG Scottish Widows Growth Long Term Asset Fund (LTAF), has appointed IP Group to manage the venture capital portfolio.
The LTAF forms part of the £3.7bn Scottish Widows Master Trust’s investment portfolio, as well as the company’s other workplace pension offerings.
Initial investments in the venture capital section of the LTAF are expected to include Oxford Quantum Circuits and Quantum Motion, both developing quantum computing technology, and Nyobolt, which specialises in ultra-fast-charging batteries.
The portfolio is also expected to invest in Genomics Limited, which uses artificial intelligence, machine learning and genetic data in preventative healthcare and drug discovery.
The announcement follows similar moves by other defined contribution pension providers. In July, Nest announced an initial £200m venture capital allocation managed by Schroders Capital, with plans to increase this to £1bn by 2030.
Meanwhile, Aegon and NatWest Cushon also committed capital to the British Business Bank’s £200m British Growth Partnership Fund earlier this year.
“The UK has no shortage of scientific excellence and does not lack entrepreneurship or talent to develop globally relevant ideas.”
Scottish Widows’ mandate forms part of the fund’s broader global private markets strategy and aims to address a shortage of follow-on funding for British businesses looking to expand.
Nalaka De Silva, head of private markets solutions at Aberdeen Investments, highlighted the challenges facing growing UK technology companies.
He said: “The UK has no shortage of scientific excellence and does not lack entrepreneurship or talent to develop globally relevant ideas. What competitive companies have lacked is sufficient pools of patient domestic capital to help them expand and grow. This partnership turns intent into investment.”
Peter Fitzgerald, chief investment officer at Scottish Widows, added: “We believe pension savers should be able to benefit from the growth and innovation taking place across the UK.
“Our proposition helps connect our workplace pension customers’ long-term savings with some of Britain’s most innovative, high-growth companies, giving them access to investment opportunities that have traditionally been available mainly to institutional investors.”
