Pioneering Investment Plan to Drive Innovation and Boost Pension Funds
In a groundbreaking move, the Chancellor announces a £320 million plan aimed at driving innovation and unlocking the initial wave of investment under the Mansion House Reforms. The comprehensive measures included in this plan are anticipated to contribute an additional £1,000 annually to people’s pension pots, fostering investment in high-growth, innovative companies to benefit savers and stimulate economic growth.
Tailored Investment Vehicles to Fuel Innovation
The government is championing new investment vehicles specifically tailored to the needs of pension schemes. This strategic approach actively facilitates investment in the UK’s innovative companies, giving a substantial boost to the economy.
The Long-term Investment for Technology and Science (LIFTS) initiative will allocate £250 million to two successful bidders, potentially attracting over a billion pounds of investment from pension funds and other sources into UK science and technology companies.
Growth Fund and Venture Capital Fellowship to Propel UK Businesses
To complement private investment vehicles, the announcement introduces a new Growth Fund within the British Business Bank (BBB). Leveraging the BBB’s substantial track record and a permanent capital base exceeding £7 billion, this fund will provide pension schemes access to opportunities in the UK’s most promising businesses. The Growth Fund has garnered support from eight pension schemes and fund managers as a valuable addition to the market.
Strengthening the Venture Capital Industry for Future Success
The package includes measures to further fortify the UK’s renowned venture capital industry. The creation of a Venture Capital Fellowship scheme will support the next generation of world-leading investors in VC funds, mirroring the successful US Kauffman Fellowship.
Chancellor’s Vision for Innovation and Future Success
Chancellor Jeremy Hunt underscores the significance of innovation for the nation’s future success, emphasizing the crucial role played by the Autumn Statement in delivering the Mansion House Reforms.
The injection of £20 million to foster ‘spin-out’ companies, born from university research, and at least £50 million additional funding for the ‘Future Fund: Breakthrough’ program, solidifies the government’s commitment to scaling up innovative companies.
A Boost for ‘Spin-Out’ Companies and Future Investments
Spin-out companies, which generated a staggering £5.3 billion in investment in 2021-22, will receive a substantial boost with the Chancellor’s announcements. The move aims to increase future investment, ensuring that researchers in world-leading universities have the necessary tools to initiate, scale, and grow innovative businesses within the UK.
Independent Review Recommends Innovation-Friendly Policies
Led by Irene Tracey, Vice-Chancellor of Oxford University, and Andrew Williamson, Managing Partner of Cambridge Innovation Capital, an independent review recommends innovation-friendly policies for universities and investors. These policies aim to position the UK as the world’s best place to start a ‘spin-out’ company, streamlining processes and learning from past success stories.
Chancellor Accepts Recommendations to Turbocharge ‘Spin-Out’ Process
Recognizing the inefficiencies of past ‘spin-out’ deals, today’s recommendations aim to expedite the process and build on TenU’s University Spin-out Investment Terms (USIT) Guide.
The Chancellor has not only endorsed all recommendations but is also poised to reveal his full response as part of the Autumn Statement. This aligns seamlessly with the Prime Minister’s commitment to fostering economic growth by supporting world-leading university research institutions, contributing around £10 billion annually to the economy.
Sources: THX News, HM Treasury &The Rt Hon Jeremy Hunt MP.
