Schroders Capital to launch a UK venture and growth LTAF with £300 million awarded by the British Business Bank and Phoenix Group (2024)

Schroders Capital, Schroders’ specialist private markets investment division, today announces it intends to launch a UK venture and growth Long-Term Asset Fund (LTAF), subject to regulatory approval, seeded with a cornerstone investment of £300 million and open to third party investors.

The firm has been awarded £150 million by the British Business Bank (BBB) to invest into UK science and tech companies, as part of the UK Government’s Long-term Investment for Technology and Science (LIFTS) initiative. This will be matched by Phoenix Group, the UK’s largest long-term savings and retirement business. Both awards are subject to ongoing commercial discussions and the internal governance processes of all involved parties.

The LTAF will aim to stimulate the UK venture capital ecosystem by mobilising institutional investment into UK technology and life science companies. It will seek to provide institutional investors with opportunities to invest long-term, through private markets as well as public, into early-stage growth businesses. It has the potential to realise significant value for both investors and for the UK economy.

Peter Harrison, Group Chief Executive, Schroders, said:

“It is a privilege to have been selected by the BBB to invest these assets into the UK’s leading science and tech start-ups enabling a broader pool of UK investors to benefit from the returns these assets can deliver.

“The UK is one of the most innovative countries in the world, punching above its weight in many sectors, including science and technology innovation. This is why it’s critical we increase investment into these sectors to develop the skills and culture that will benefit savers today and in the future.

“A UK venture and growth LTAF will act as a catalyst to unlock institutional investment, particularly from UK defined contribution pension schemes, and increase the supply of capital to UK technology and science start-ups. This initiative will ultimately strengthen UK economic growth and reinforce the UK’s position as the natural home for fast-growing companies. We’re delighted to partner with both the BBB and Phoenix Group to deliver this and open the opportunity to even more investors.”

Andy Briggs, Chief Executive Officer, Phoenix Group, said:

“Our successful bids into the LIFTS initiative, subject to internal governance processes, is testament to our continued commitment to give our customers access to the potential returns of a broader range of assets, in line with their international counterparts. Currently, the UK is significantly behind comparable international markets who typically invest 23% of their pensions in private market assets, compared to 9% in the UK.

“Working in partnership with Schroders and BBB, will give us the opportunity to provide stable, patient capital to the UK’s most innovative businesses to accelerate their growth, whilst delivering potential higher returns to our customers. We will continue to work with all stakeholders to deliver a successful outcome that has customers at its core.”

Last year, Schroders was the first asset manager to launch a Long-Term Asset Fund (LTAF), Climate+, designed to enable UK investors, with longer-term horizons, to invest in illiquid and private assets. It built on this last month with the launch of its second LTAF, Renewables+.

Schroders has also been a key supporter of the UK’s Capital Markets Industry Taskforce (CMIT), an industry-led group which supports wider UK regulatory reform designed to reinforce the strength of the UK’s capital markets.

With $84.4 billionof assets under management*, Schroders Capital provides investors with access to a broad range of private markets investment opportunities across the likes of real estate, private equity and infrastructure. It has previously been appointed by Nest, the UK’s largest workplace pension scheme, as well as the Wales Pension Partnership, to run significant private equity mandates in recent years.

*Assets under management as at 31 December 2023(including non-fee earning dry powder and in-house cross holdings)

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Note to Editors

The UK venture and growth LTAF, subject to regulatory approval, would be available to UK registered pension schemes, UK life insurance companies holding the units for the purpose of tax exempt business, UK registered charities.

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Schroders Capital

Schroders Capital provides investors with access to a broad range of private market investment opportunities, portfolio building blocks and customised private market strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private market mandates.

The team aims to achieve sustainable returns through a rigorous approach and in alignment with a culture characterised by performance, collaboration and integrity.

With $84.4 billion (£66.2 billion; €76.4 billion)*assets under management, Schroders Capital offers a diversified range of investment strategies, includingreal estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists).

*Assets under management as at 31 December 2023(including non-fee earning dry powder and in-house cross holdings)

Schroders plc

Schroders is a global investment management firm with £750.6 billion (€866.2 billion; $956.9 billion) assets under management, as at 31 December 2023. Schroders continues to deliver strong financial results in ever challenging market conditions, with a market capitalisation of circa £7 billion and over 6,100 employees across 38 locations. Established in 1804, the founding family remains a core shareholder, holding approximately 44% of Schroders’ shares.

Schroders has benefited from a diverse business model by geography, asset class and client type. It offers innovative products and solutions across four core growing business areas; asset management, solutions, Schroders Capital (private markets) and wealth management. Clients include insurance companies, pension schemes, sovereign wealth funds, high net worth individuals and foundations. Schroders also manages assets for end clients as part of its relationships with distributors, financial advisers and online platforms.

Schroders aims to provide excellent investment performance to clients through active management. It also channels capital into sustainable and durable businesses to accelerate positive change in the world. Schroders’ business philosophy is based on the belief that if we deliver for clients, we will deliver for our shareholders and other stakeholders.

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