Sheffield-based British Business Bank, the UK’s economic development bank, announced it will create a new vehicle called the British Growth Partnership to “crowd-in UK pension fund and other institutional investment into venture capital funds and innovative businesses, supported by a cornerstone government investment.”
British Business Bank said: “Investments from the fund will be made on a long term, fully commercial basis, independent of government, leveraging the Bank’s capability and market access to a range of promising high growth UK companies.
“Over the coming months the British Business Bank will seek to raise hundreds of millions of pounds of investment for this model, with the aim of making investments by the second half of 2025 …
“Reforms to the British Business Bank’s financial framework will be implemented that will increase the Bank’s impact and increase its ability to respond flexibly to the market, including putting the Bank’s £7.9bn commercial programmes on a permanent footing.
“Making the capital base of the Bank’s commercial programmes permanent will allow the Bank to re-invest its commercial returns over the long-term, catalysing more capital into UK companies.
“It will also allow the Bank to deploy its capital in a more flexible way using its full range of capabilities to support the Government’s missions and the delivery of its Industrial Strategy.”
The bank said it recently awarded £250 million under the Long-Term Investment for Technology and Science (LIFTS) initiative to Schroders Capital (£150m) and ICG plc (£100m)to create two new investment vehicles that are accessible to pension fund and other institutional investment.
This will be supported by £250 million of pension investment from Phoenix Group, and together these investments are expected to generate over a billion pounds of investment into UK science and technology companies.
British Business Bank CEO Louis Taylor said: “We welcome today’s announcement by the Chancellor of the Exchequer and Secretary of State for Business and Trade that the British Business Bank will establish the British Growth Partnership, subject to regulatory approval, encouraging more UK pension fund investment into the UK’s fastest growing, most innovative companies.
“These companies have the potential to drive productivity, jobs and growth, and will support the UK to be internationally competitive in the industries of the future.
“By unlocking hundreds of millions of pounds of domestic investment for the UK’s high growth businesses through the creation of the British Growth Partnership, the UK can capture the full commercial potential of its world class breakthrough technology companies, providing a legacy for future generations of pensioners.
“We also welcome the announcement to implement a set of reforms to the British Business Bank’s financial framework by putting the Bank’s £7.9bn commercial programmes on a permanent footing. This means the Bank can flexibly re-invest its investment returns over the long term to increase growth and prosperity across the UK.
“This announcement is a strong endorsement of the British Business Bank’s 10-year track record, market access and capabilities including our position as the UK’s largest domestic investor in venture and venture growth capital and the most active late-stage investor in UK life sciences and deeptech.
“Alongside this announcement, we also welcome the transformation of the UK Infrastructure Bank to become the National Wealth Fund and look forward to working in close partnership with the National Wealth Fund to deliver the Government’s missions and Industrial Strategy.”