Schroders Capital has completed the first £500m (€599m) close of its UK innovation long-term asset fund (LTAF), with commitments from the British Business Bank and Phoenix via a private markets venture with Schroders, Future Growth Capital.
According to Schroders Capital, the successful close indicates a desire from defined contribution (DC) pension schemes and other institutional investors to participate in the growth and development of UK early-stage companies.
Its close coincides with a period of significant technological advancements in artificial intelligence (AI) within the UK and marks a pivotal moment for growth in UK venture.
The strategy is concentrated on fostering the growth of groundbreaking UK early-stage companies, with a particular emphasis on technology and life sciences, in line with the UK’s Long-Term Investment for Technology and Science (LIFTS) initiative.
The fund invests in key global innovation themes including AI, cybersecurity, fintech and payments, consumer, infrastructure software, vertical software as a service (SaaS), oncology and biotech discovery platforms.
It has already deployed capital, and examples of investment into these themes include the strategy’s first two investments. In January, the LTAF invested in Synthesia, the world’s leading enterprise AI-powered video communications platform, and this month completed an investment in Luminance, a pioneer in Legal-Grade AI.
The investment in Synthesia will fuel the firm’s next phase of growth, supporting product and talent growth, and drive the expansion of its innovative AI-powered video platform to meet the evolving needs of enterprises in several markets, including Japan, Australia, Europe and North America.
This was an extension of Schroders Capital’s long-standing partnership with Synthesia through its co-investment partner, MMC Ventures.
For Luminance, the funding will provide resources for further innovation out of the company’s Cambridge R&D hub, as well as expansion with new hires and offices in the US, Asia-Pacific and Europe.
The fund is managed by Schroders Capital’s head of private equity investments, Tim Creed, and investment director, Harry Raikes.
Creed said: “The UK remains a hub for European innovation. We are pleased to complete our first close with a strategy dedicated to nurturing this vibrant innovation landscape.”
He said the milestone underscores the interest from pension schemes, reflecting the need for strategies that drive forward-thinking investments.
“Early-stage UK businesses are at the forefront of driving groundbreaking advancements not only in technology but in a huge range of sectors. Now more than ever, they will play a crucial role in shaping the future of the UK economy,” he added.
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