Local Government Pension Scheme (LGPS) funds have invested more than £150m through a Northern Gritstone fund to be deployed to back into science and technology firms in the North of England.
The funding commitment has been provided by South Yorkshire Pension Fund, West Yorkshire Pension Fund, Greater Manchester Pension Fund, Merseyside Pension Fund and East Riding Pension Fund.
Chaired by Jim O’Neill and led by chief executive officer Duncan Johnson, Northern Gritstone has also secured the support of a large number of leading institutional investors including M&G, Columbia Threadneedle, British Patient Capital, Lansdowne Partners and property investor Bruntwood.
In total, Northern Gritstone secured £313m from LGPS funds and other institutional investors, it said.
The announcement builds on the momentum that the company has built since its first fund raising in May 2022, which has seen it make initial investments in early-stage businesses and expand its investment team under the leadership of chief investment officer Marion Bernard.
Since then, the company has begun to provide funding to some of the North of England’s science and innovation based businesses. It has already announced investments in 15 companies in the region across advanced materials, health technology and AI as part of deals that have contributed nearly £100m in funding.
The company said that it will continue its investment in these areas, tapping into the pipeline of developments in the North of England that include some of the UK’s “most exciting future science and technology-enabled businesses”.
In its fundraising, Northern Gritstone was advised by Lazard Venture and Growth Banking led by Garri Jones. Its legal advisers are Macfarlanes and Pinsent Masons.
O’Neill, said: “Our ability to raise funding on this scale highlights the support for the world-class science and innovation being developed in the North of England.”
He added that receiving the endorsements of asset managers, mayors and pension funds shows the broad appeal of Northern Gritstone’s offering.
He said: “It is a show of faith in the potential for growth in the northern economy and a significant step in our development of a technology and innovation hub in the region.”
Johnson added: “For too long, the North of England’s world-class research and innovation has not received the funding it deserves. Today’s announcement is a vote of confidence in both the region and our Profit with Purpose philosophy.”
He said: “Our investors’ backing will allow us to explore further opportunities across the wider northern venture ecosystem and stimulate growth and job creation in the region.”
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