UK pension providers have joined forces to establish a new investment fund worth more than £1 billion, aimed at supporting the next generation of high-growth science and technology businesses.
The proposed UK scale-up fund is designed to increase the amount of growth capital available to promising domestic companies while giving pension savers greater exposure to the potential long-term returns generated by successful UK businesses.
The fund would invest in established scale-up companies with strong growth prospects, helping them secure the finance needed to expand, develop new technologies and create jobs without having to look overseas for investment.
For pension providers and their members, the initiative is intended to deliver competitive long-term returns by investing in companies operating in some of the UK’s fastest-growing sectors.
The government believes the fund could also provide a wider boost to the economy by encouraging more innovative businesses to start, grow and remain in the UK.
Prime Minister Andy Burnham said the fund would help connect pension investment with entrepreneurs and technologies capable of supporting the country’s future industrial growth.
He added that the initiative could create more opportunities for workers, improve returns for pension savers and encourage more businesses to build their long-term future in Britain.
The announcement reflects a broader effort to direct more pension capital towards productive investment in the UK economy. Pension funds manage substantial amounts of long-term savings, and increasing investment in growing businesses could provide companies with an important source of patient capital.
For pension savers, the potential benefit lies in gaining access to a wider range of investments and sharing in the growth of successful UK companies. However, as with all investments, returns will depend on the performance of the businesses selected by the fund.
If successfully implemented, the new scale-up fund could help bridge the funding gap faced by ambitious science and technology companies while supporting stronger retirement outcomes for pension scheme members.
