Schroders Capital, the $97.3bn specialist private markets business, today announces it has received regulatory approval from the UK’s Financial Conduct Authority to launch its third Long-Term Asset Fund (LTAF) and the first dedicated to UK venture capital.
The newly-approved LTAF will offer defined contribution (DC) and other institutional investors the opportunity to participate in the growth and development of groundbreaking UK early-stage companies focused on technology and life sciences.
LTAFs are vehicles designed to enable UK investors with longer-term horizons to invest in more illiquid assets, allowing them to take advantage of the robust returns and diversification benefits of private markets.
Schroders Capital will invest across companies that are pioneering the development of long-term innovation themes such as artificial intelligence, quantum computing, fintech, cybersecurity and oncology.
As announced earlier this year, the fund will be seeded with a cornerstone investment of £300m; Phoenix identified institutions capable of invigorating UK life sciences companies and selected Schroders as a partner to commit an amount of £150m to the fund. The British Business Bank is also making a commitment of £150m, as part of the UK Government’s Long-term Investment for Technology and Science (LIFTS) initiative.
Schroders Capital’s private equity team has a longstanding and successful track record in venture capital investing with almost three decades of early-stage technology and healthcare investment experience. The team also has significant experience in the UK having invested £1.3bn into around 1000 UK companies to date.
The firm is already a market leader in offering structures which provide greater access to private assets through its range of listed vehicles, as well as semi-liquid and illiquid structures. This will be the firm’s third LTAF, having launched one earlier this year and the UK’s first in April 2023.
Tim Creed, Head of Private Equity Investments, Schroders Capital, said: “The UK is the largest venture capital market in Europe and a key global innovation hub. This fund will allow a broader range of investors to benefit from the next technology revolution and access innovative companies driving long-term megatrends. With the UK being home to a growing number of unicorns[2] and our ability to invest through the full lifecycle, we can tap into the best companies with high growth potential on behalf of our investors.”
Tim Horne, Head of UK DC at Schroders, said: “Supporting the UK Government’s Mansion House reforms, this fund will help unlock the potential for DC schemes to invest into fast-growing, early-stage companies. These investors have so far been underweight private markets, venture capital and UK businesses in particular.
“Schroders has been an innovator in providing UK DC investors with access to private markets, having launched the UK’s first LTAF last year. This will be the UK’s first dedicated vehicle for DC investors to access venture capital.
“UK savers will be able to benefit from the potential returns and investment diversification that these innovative sectors can provide, whilst also backing homegrown businesses.”
Ian Connatty, Deputy Chief Investment Officer, British Business Bank, said: “We’re pleased to see the FCA approval of Schroders’ third LTAF, the first dedicated to UK venture capital. This is an important step towards the launch of LIFTS, which has the potential to unlock £1bn of funding for the UK’s most innovative growing science and technology companies, while also enabling the UK’s pension savers to benefit from their success.”
Source