Listed companies shouldn’t be excluded from Burnham’s Scale-Up Fund | PiQ Markets

Listed companies shouldn’t be excluded from Burnham’s Scale-Up Fund

↳ Why This Matters

The UK Scale-up Fund aims to provide crucial domestic capital for high-growth British companies, potentially boosting the technology sector, creating jobs, and offering better returns for pension savers by keeping profits and intellectual property within the UK.

Key facts

A £1 billion UK Scale-up Fund is being established to invest in British science and technology companies.
The fund aims to keep ownership of high-growth firms within the UK.
Participating pension providers include Railpen, Nest, Border to Coast, LGPS Central, and Local Pensions Partnership Investments.
The British Business Bank will co-invest and help source investment opportunities.
The fund targets companies with proven technology needing capital for commercialization and expansion.

Prime Minister Andy Burnham has announced the proposed launch of a £1 billion UK Scale-up Fund, designed to channel capital from major UK pension providers into the country's fastest-growing science and technology companies. The initiative, announced on Monday, July 27, aims to keep ownership of these innovative businesses within the UK by directing a portion of hundreds of billions of pounds in retirement savings towards firms that have demonstrated working technology but require significant funding for commercialization, hiring, and market expansion.

The fund is structured as a consortium, with participating pension schemes like Railpen, Nest, Border to Coast, LGPS Central, and Local Pensions Partnership Investments expected to commit capital under their own mandates while sharing access to a common pipeline of opportunities sourced with the assistance of the British Business Bank. The British Business Bank is collaborating with the pension providers on the launch and intends to co-invest. The Office for Investment, part of HM Treasury, is also supporting the consortium. A process to select an asset manager for the fund is anticipated to commence shortly.

This fund addresses a gap in the market for companies that have moved beyond the early-stage, high-risk phase but are not yet large enough for traditional private equity investment. These businesses often have a viable product and growth plan but struggle to raise the tens of millions needed for scaling. The stated focus on science and technology sectors, including life sciences, advanced manufacturing, artificial intelligence, and clean energy, aligns with a broader industrial strategy to foster regional job creation and retain intellectual property within the UK. Chancellor of the Exchequer John Healey stated that the fund will help "unlock good growth in every postcode" and provide better returns for savers.

Frequently asked questions

The fund aims to invest in British science and technology companies that have proven technology but need capital to scale, with the goal of keeping ownership and profits within the UK and providing returns for pension savers.

Several major UK pension providers are exploring participation, including Railpen, Nest, Border to Coast, LGPS Central, and Local Pensions Partnership Investments.

The fund will focus on science and technology businesses that have moved past the earliest stages of development but are not yet large enough for traditional private equity, requiring capital for commercialization, expansion, or clinical trials.

The British Business Bank is working with pension providers to help launch the fund, will co-invest, and will assist in sourcing investment opportunities for the consortium.

What Happens Next

01A process to appoint an asset manager for the UK Scale-up Fund is expected to begin shortly.