British Business Bank to launch venture capital initiative for pension funds

The British Business Bank (BBB) plans to launch a ‘Venture Link’ initiative for pension funds as part of a package of measures to help pension funds boost their investment capability.

This will see the bank publish enhanced information on its commitments to venture funds, with the aim of supporting pension funds as they develop their strategy, reduce barriers to investment and help to unlock billions more in long-term investment for UK science, technology and innovation.

The bank said it will consult with stakeholders on the design of this initiative.

Announcement of the initiative comes as the Bank today confirmed that Aegon, NatWest Cushon and M&G have allocated to the first fund launched by the British Growth Partnership, which is targeting £200m (€227m) for its first round of fundraising, due to close at the end of the current financial year.

The Partnership aims to encourage more UK pension funds and other institutional investors into the UK’s fastest-growing, most innovative companies.

In May, London CIV became the first LGPS pool to announce its intention to work with the bank on the launch of the British Growth Partnership, and discussions are ongoing regarding a potential investment in the fund.

The initial fund will have a direct investing strategy, co-investing alongside the British Business Bank’s network of fund managers. Investments from the fund will be made on a fully commercial basis, independent of government, leveraging the bank’s capability and market access to invest in a range of promising high-growth UK companies.

In May, the Financial Conduct Authority granted regulatory approval to BBB Investment Services, the British Business Bank’s third-party arm, to provide investment services to clients.

Louis Taylor, chief executive officer of British Business Bank, said: “Today’s announcement brings us one step closer to mobilising institutional capital at scale into the UK’s fastest growing companies, both diversifying pension portfolios and providing much needed scale-up funding.

“The British Growth Partnership will provide access to the bank’s live pipeline of scale-up businesses, providing a vital bridge between institutional investors and the UK’s thriving venture capital sector. We are making strong progress with our initial fund, and this news demonstrates the appetite across the full spectrum of pension funds to increase allocations to UK venture capital.”

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