Future Planet Capital (FPC) has launched a British Co-Investment Fund (BCF) to offer UK pension schemes a “new and innovative” route to invest in private high-growth UK companies.
The fund will launch in partnership with pension solutions provider Mobius Life and channel pension investment into the UK’s most innovative and impactful businesses.
It will allow pension scheme managers to allocate capital to UK venture investment across the whole of the UK, with the potential for higher long-term returns for savers.
This will deliver one of the few routes for corporate, Local Government Pension Scheme (LGPS) and defined contribution (DC) pension schemes to support some of the UK’s most significant fast-growing, privately held businesses, in a direct response to government calls to unlock pension capital to invest in UK private markets.
The fund will aim to direct up to £1bn of pension investment into these companies.
FPC pointed out that pensions managers currently face significant barriers to venture investment in UK businesses, including fee and liquidity restrictions, and resource and time constraints.
It said it has engaged extensively across the pensions industry and, alongside Mobius Life, has developed a new and effective route for pension investment that addresses these issues and can help achieve the objectives of the Mansion House Compact.
In July 2023, the then UK chancellor Jeremy Hunt introduced the Mansion House Compact, a commitment calling on DC pension schemes to boost investment in UK unlisted equities. As part of the compact, signatories are expected to allocate at least 5% of their default funds to unlisted equities by 2030.
The initial signatories of the compact included Aviva, Scottish Widows, Legal & General, Aegon, Phoenix, NEST, Smart Pension, M&G and Mercer. Since then, Aon and Cushon have also joined the list.
Offering
Mobius Life will offer its pension trustees, advisers and asset managers access to venture capital investments, managed by FPC, through a blended feeder fund structure on its platform. This will include venture capital investment alongside liquid listed assets, to enable pension managers to meet their fee and liquidity requirements.
FPC claims the scheme will be “the first of its kind” in the venture capital space, and with more than 700 UK pension clients and £26bn in assets, Mobius Life is ideally positioned to support FPC deploying significant capital into UK high-growth businesses.
The BCF intends to launch with £150m of capital in Q1 2025, of which up to £50m will come from existing FPC clients, including both local government pension funding and further capital from the investment arm of the retailer Timpson Group.
It said there will also be an opportunity for sovereign wealth funds and corporate venture capital investors to provide additional investment.
FPC added that deal opportunities will be sourced via leading universities and government research centres across the UK, targeting breakthrough sectors like artificial intelligence, engineering biology, quantum computing and semiconductors, as well as climate technologies and wider impact-led areas.
FPC’s executive chair and founder, Douglas Hansen-Luke, said: “The British Co-Investment Fund is a much-needed solution to support pension managers in meeting the objectives of the Mansion House Compact whilst also helping British pension savers benefit from the opportunities presented by the UK’s most exciting private companies.”
He said that FPC already works with the country’s top universities and research centres, to invest in some of the UK’s most promising impact-led business. And by democratising access to venture investments for pension savers, he said that FPC can channel further capital into these businesses, and ensure the UK remains at the forefront of global innovation.
Joshun Sandhu, director of asset manager solutions at Mobius Life, added: “We are excited to partner with Future Planet Capital, harnessing our technology and expertise to connect UK high-growth companies and pension schemes.”
He said that the priority is to improve member outcomes through a wide range of solutions, adding that as part of this effort, Mobius recognises its responsibility to offer a credible means of access to venture capital in the UK.
Independent strategist Julius Pursaill, who is an adviser to organisations including the Cushon Master Trust, said there are “a number of good reasons” to support the UK growth agenda and innovations like the British Co-Investment Fund, play an important role in delivering on this objective, driving financial growth, whilst also offering access to innovative, impact-focused sectors such as climate technology and artificial intelligence, which can help secure the future for pension savers and broader society.
Read the digital edition of IPE’s latest magazine
No comments yet