Investment boost in UK science businesses
BRITAIN’S fastest-growing start-ups are in line to receive billions of extra pounds of investment under a scheme to help spur more pension schemes and venture capital cash into science and technology businesses.
The Treasury unveiled the Longterm Investment for Technology & Sci- ence competition – an initiative under which it plans to provide up to £500million that is expected to go into investment vehicles to then encourage pension schemes and other investors to also put cash in, that could be used to back science and technology businesses.
It is thought the scheme could have a similar effect as the French Tibi Initiative, whereby Emmanuel Macron helped to convince institutional investors to commit €5 billion (£4.4 billion) into late-stage venture capital funds and asset managers in an attempt to make more cash available for start-ups.
Catherine Lewis La Torre, the chief executive of the British Business Bank, said the latest move by Kwasi Kwarteng was poised “to unlock billions of additional investment for the UK’S fastest growing and most innovative companies”. She said: “The lack of institutional investment into UK venture capital (VC) is a longstanding issue, and has meant that Uk-based VC funds have historically been reliant on overseas capital.”
It comes alongside plans to change regulations around the pension scheme caps which are geared to essentially encourage more pension schemes to invest in high-growth start-ups. Official figures show that total private pension wealth in Great Britain stood at around £6.1trillion between April 2016 and March 2018, with much of it held in bonds. Industry experts suggest that funnelling more of that into funds that could back start-ups and scale-ups could significantly change the investment ecosystem in the UK and boost growth.
Steve Bates, the chief executive of the Bioindustry Association, said: “UK pension schemes have not been investing in innovative life science and biotech companies, meaning UK pension savers are not benefitting from the UK’S competitive strengths.
“Today’s announcement provides the catalyst needed to build the biotech investment expertise in the city of London to match the global scale of the biotech ecosystem we have around the country.”