Fresh wave of VCs pledge pension cash for startups

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An additional 50 investment firms have signed a commitment to support the flow of pension money towards tech startup investments.

The Treasury-backed Venture Capital Investment Compact was first announced in October and signed by 20 investment firms – including Octopus Ventures and Balderton Capital – as a measure to unlock billions in untapped investment from retirement funds.

The new signatories bring the total number of firms in the compact up to 70, with a combined £100bn in assets.

Michael Moore, CEO of the British Private Equity and Venture Capital Association (BVCA), said on Tuesday: “This is a great opportunity for British pension savers to benefit from returns garnered from VC innovation in the UK while helping businesses to grow, succeed and create jobs.”

“UK private capital can help them achieve this, because, as an asset class, it has consistently delivered better returns for savers than public markets for decades.”

The boost to the compact comes as the chancellor unveiled £320m in support of the plan to channel pension cash to startups, known as the Mansion House reforms.

Jeremy Hunt on Tuesday announced a series of measures to support new investment vehicles “tailored to the needs of pension schemes”. This includes a £250m commitment to two successful bidders under the long-term investment for technology and science (LIFTS) initiative.

LIFTS was launched to encourage the establishment of new funds and investment structures to support UK institutional investment into tech firms.

“Innovation is the key to our future success as a nation and its vital that we do all we can to help companies start, scale and grow in the UK,” said Hunt.

“Tomorrow’s Autumn Statement will be a huge step towards delivering our Mansion House Reforms and unleashing the full potential of our pensions industry.”