Major UK pension providers are exploring the creation of a UK scale-up fund of more than £1bn to invest in high-growth UK science and technology companies.
Railpen, NEST, Border to Coast Pensions Partnership and the British Business Bank are working together on the proposed fund, which aims to increase the supply of UK growth capital while giving pension savers greater access to returns from successful UK companies.
The partners said bringing together major pension investors would help connect institutional capital with the companies, founders and venture managers driving the next wave of UK innovation.
The British Business Bank is working with the pension providers to support the launch of the fund and intends to invest alongside the group. The Office for Investment is also supporting the consortium as it explores the development of the vehicle.
The initiative builds on the British Growth Partnership, which the UK government tasked the British Business Bank with establishing in 2024 to attract UK pension fund and other institutional investment into venture capital and innovative businesses, supported by a cornerstone government investment.
In April, Aegon UK, Cushon Master Trust, M&G and the British Business Bank committed £200m (€229m) to British Growth Partnership Fund I.
The fundraising marked the first time the British Business Bank had raised external capital from multiple investors, securing commitments from three large UK defined contribution schemes and master trusts.
Business, innovation, science and trade secretary Jonathan Reynolds said: “The ambition of major pension providers to back the next generation of British success stories is an important vote of confidence in UK innovation. By investing in innovative UK companies, they can help drive long-term growth while helping pension savers share in their success.
“Our message is clear. Britain is open for business, open to investment and determined to put science, technology and innovation at the heart of our economic future.”
Andy Bord, chief executive officer at Railpen, said: “The UK Scale-up Fund represents a compelling investment opportunity where disciplined, patient capital can help growing companies scale, provide attractive returns for pension savers and generate lasting economic growth.”
Ian Cornelius, NEST’s CEO, said the organisation sees an important role for pension capital in helping successful UK businesses access the funding they need to grow.
He said: “We believe there can be a strong alignment between delivering attractive long-term outcomes for members and supporting innovation, job creation and economic growth across the UK.”
Rachel Elwell, CEO of Border to Coast, noted: “Through our own UK Opportunities strategy, we see the role pension capital can play in backing high-quality UK investment opportunities. By combining scale, collaboration, investment discipline, and a strong pipeline of high-quality opportunities, this initiative can help deliver attractive long-term outcomes for pension savers while enabling more innovative UK businesses to grow and compete.”
Leandros Kalisperas, CEO for the British Business Bank, added: “By bringing together long-term pension capital with the UK’s most ambitious growth businesses, we have the opportunity to create a virtuous cycle—supporting innovation, attracting further private investment, and delivering strong long-term outcomes for pension savers.”
