A collective of prominent venture capital firms in the UK, responsible for over £25bn, have entered into an agreement supported by the chancellor, Jeremy Hunt, to increase funding for fast-growing businesses throughout the nation.
The government is encouraging private investment in Britain before the chancellor’s autumn statement. Hunt stated that the plan, which involves 20 of the UK’s biggest funds, is a great victory for the country.
The list of signatories consists of SV Health Investors, led by former vaccines taskforce leader Kate Bingham, and Northern Gritstone, an investment fund overseen by former Goldman Sachs chief economist Jim O’Neill.
Rephrased: The “venture capital investment compact” is a voluntary pledge that seeks to enhance collaboration between venture capital funds and the pensions industry in order to increase investments in rapidly growing businesses in the UK.
Hunt stated that the compact is a significant victory, highlighting the willingness of renowned venture capital firms to assist pension providers in funding high-growth companies.
As part of a program led by the industry, companies will collaborate with pension funds to discover and generate more appealing investment options in the private market. They will also utilize pension reforms introduced by Hunt earlier this summer.
The organization responsible for initiating the agreement, the British Private Equity and Venture Capital Association, aims to persuade pension funds to become limited partners in the funds they oversee and advise through formal collaboration.
The Treasury is organizing a roundtable on Tuesday to commemorate the compact. This is in line with the Mansion House reforms outlined by the chancellor earlier this year, with the goal of releasing billions of pounds of investment from the UK pensions sector to support rapidly expanding businesses.
In July, changes were declared and the biggest pension fund managers in the UK, such as Aviva, Scottish Widows, and Legal & General, pledged to allocate 5% of assets from default pension funds towards private ventures, such as infrastructure and high-growth companies.
The effort aligns with larger strategies to increase funding for domestic technology and life sciences companies in order to position the UK as a competitor to Silicon Valley. In recent years, Britain has consistently placed near the bottom of the G7 in terms of private investment in the economy.
The update was made known the day after the Treasury met with infrastructure investors for a separate roundtable on Monday to talk about the “opportunities and challenges” they were encountering, in preparation for the autumn statement on 22 November. Hunt is anticipated to address the venture capital agreement at a pensions summit organized by the City of London on Wednesday.
The Treasury stated that officials discussed their continued dedication to preserving and enhancing the UK’s status as a top destination for private investors in infrastructure during the meeting. This commitment remains unchanged, even after the recent choice to cancel the northern portion of the HS2 high speed rail project.