Schroders Capital to launch a UK venture and growth LTAF with £300 million awarded by the British Business Bank and Phoenix Group

7 March 2024

Schroders Capital, Schroders’ specialist private markets investment division, today announces it intends to launch a UK venture and growth Long-Term Asset Fund (LTAF), subject to regulatory approval, seeded with a cornerstone investment of £300 million and open to third party investors.

The firm has been awarded £150 million by the British Business Bank (BBB) to invest into UK science and tech companies, as part of the UK Government’s Long-term Investment for Technology and Science (LIFTS) initiative. This will be matched by Phoenix Group, the UK’s largest long-term savings and retirement business. Both awards are subject to ongoing commercial discussions and the internal governance processes of all involved parties.

The LTAF will aim to stimulate the UK venture capital ecosystem by mobilising institutional investment into UK technology and life science companies. It will seek to provide institutional investors with opportunities to invest long-term, through private markets as well as public, into early-stage growth businesses. It has the potential to realise significant value for both investors and for the UK economy.

Peter Harrison, Group Chief Executive, Schroders, said: “It is a privilege to have been selected by the BBB to invest these assets into the UK’s leading science and tech start-ups enabling a broader pool of UK investors to benefit from the returns these assets can deliver.

“The UK is one of the most innovative countries in the world, punching above its weight in many sectors, including science and technology innovation. This is why it’s critical we increase investment into these sectors to develop the skills and culture that will benefit savers today and in the future.

“A UK venture and growth LTAF will act as a catalyst to unlock institutional investment, particularly from UK defined contribution pension schemes, and increase the supply of capital to UK technology and science start-ups. This initiative will ultimately strengthen UK economic growth and reinforce the UK’s position as the natural home for fast-growing companies. We’re delighted to partner with both the BBB and Phoenix Group to deliver this and open the opportunity to even more investors.”

Andy Briggs, Chief Executive Officer, Phoenix Group, said: “Our successful bids into the LIFTS initiative, subject to internal governance processes, is testament to our continued commitment to give our customers access to the potential returns of a broader range of assets, in line with their international counterparts. Currently, the UK is significantly behind comparable international markets who typically invest 23% of their pensions in private market assets, compared to 9% in the UK.

“Working in partnership with Schroders and BBB, will give us the opportunity to provide stable, patient capital to the UK’s most innovative businesses to accelerate their growth, whilst delivering potential higher returns to our customers. We will continue to work with all stakeholders to deliver a successful outcome that has customers at its core.”

Source: Schroders