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A consortium of some of the UK’s largest pension providers are exploring the creation of a £1 billion fund to invest in scaling businesses.
The proposed UK Scale-up Fund, backed by pension firms including Nest, Railpen, LPPI and Border to Coast, would “target the best opportunities born out of UK innovation in science and technology”.
The British Business Bank is supporting the launch of the fund and with the intention of investing in partnership with the group.
Prime minister Andy Burnham said:
“Today sends a clear message: this is a vote of confidence in British business, British talent and British ambition.
“This new fund would help unlock good growth in every postcode, connecting pension investment with the entrepreneurs and technologies that will reindustrialise Britain and create the jobs of the future.
“That means more opportunities for working people, stronger returns for savers, and more businesses choosing to start, grow and stay in Britain.”
Business, innovation, science and trade secretary Jonathan Reynolds added:
“Britain leads the way in science, technology and innovation, and we want to ensure more of our most promising businesses can start, scale and succeed here in the UK.
“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.”
The pension providers involved in the fund represent defined contribution, defined benefit and Local Government Pension Scheme funds.
Andy Bord, Railpen CEO, said:
“Our priority is always to deliver strong long-term outcomes for our members. The UK is a dynamic powerhouse of innovation. 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.
“We are pleased to have helped shape this initiative, which will play a vital role in supporting ambitious companies with global reach to build their future here in the UK, creating a stronger economy for our members to retire into.”
Ian Cornelius, Nest CEO, added:
“The UK is home to many innovative, high-growth businesses and has a strong track record of nurturing world-leading science and technology companies, with many of today’s global success stories founded here.
“As a long-term investor on behalf of more than 14 million members, Nest sees an important role for pension capital in helping successful UK businesses access the funding they need to grow. 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.”
