British Business Bank has invested £250m in Schroders Capital's Long Term Asset Fund (LTAF). BBB's investment will be matched by Phoenix Group through Future Growth Capital, a new private market joint venture with Schroders.
The two allocations mean Schroders LTAF will be seeded with £500m, with the first investment expected to be made by the end of the year.
The BBB's £250m commitment is for the Government's new technology and science, aimed at establishing new investment vehicles for crowd-in investment from institutional investors, particularly defined contribution pension funds. This was done through the Long Term Investments (LIFTS) initiative.
Schroders' LTAF aims to fund the growth and development of late-stage UK companies with a focus on technology and science, with 20% of the funds expected to be invested in life sciences.
“Long-term investments in technology and science are potentially game-changing initiatives,” said BBB CEO Louis Taylor.
“With the intention of catalyzing over £1 billion of funding, including from UK pension funds, LIFTS supports the growth and ambitions of the UK’s most innovative science and technology companies and, with the right funding and support, will lead the world. Companies can become tomorrow's.
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“We are pleased to have completed our investment in Schroders Capital, together with Phoenix Group and Future Growth Capital. They look forward to making their first investment under this initiative by the end of this year. We are aiming for
Schroders received approval from the Financial Conduct Authority in September to launch the first-ever LTAF dedicated to UK venture capital.
Georg Wunderlin, chief executive of Schroders Capital, praised the LIFTS scheme and said the £500m investment will “drive further domestic investment into these key growth areas, giving these companies an advantage.” “It will enable us to maintain our competitiveness and continue to innovate from here in the UK.” ”
“The LTAF structure allows access to a wider range of investors and allows pension savers to benefit from the growth potential of these companies, while providing much-needed support to continue driving the development of companies. You can unlock your investments,” Wonderlin added.
“Furthermore, our strategic partnership with Phoenix, Future Growth Capital, will support the UK Mansion House Compact and build scale to unlock these investment opportunities in the private market and the benefits they can offer. We will provide it.”
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Phoenix Group CEO Andy Briggs said: “Britain pension savers currently enjoy lower returns than pension savers in countries such as Australia and Canada. One of the reasons for this is that the UK has access to private market assets. “The allocation to Japan is much lower than in comparable countries.”
“This £250m investment in the UK Government’s LIFTS initiative on behalf of our customers will provide stable patient funding for the UK’s most innovative businesses. This will help accelerate growth for our customers. At the same time, we provide our customers with access to a wider range of assets with the potential for higher returns.”
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