BRITISH Business Investments, the commercial arm of the state-backed British Business Bank, has launched a new £500m programme to boost scale-up funding.
The Managed Funds Programme (MFP), first unveiled in the Autumn Budget, is designed to help address the UK’s patient capital funding gap by increasing access to longer-term venture and growth capital for high-growth businesses.
British Business Investments said that in the UK, institutional investors have lower allocations to the venture capital asset class compared with their counterparts in the US.
In order to address this, the MFP will seek to draw in institutional capital to the UK’s venture and growth capital markets.
The programme will aim to generate a commercial rate of return derived from a diversified portfolio of fund investments, selected by experienced fund of funds managers.
“British Business Investments manages the UK Innovation Investment Fund (UKIIF), an earlier generation of funds-of-funds, to produce attractive returns for the tax payer,” said Catherine Lewis La Torre, chief executive of British Business Investments.
“Venture capital funds, backed by UKIIF, have already invested in a large number of outstanding UK businesses such as Revolut and Purple Bricks through VC funds partners Balderton and DN Capital respectively.
“The £500m made available today under our new MFP will build on this experience by attracting more institutional capital to the venture and growth asset class.
“Through this MFP, prospective investors will be able to access high quality venture and growth capital funds that will be investing in the success stories of tomorrow.”