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Companies: Venture Capital

Question for Department for Business, Energy and Industrial Strategy

UIN 92648, tabled on 22 September 2020

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps he is taking to ensure that innovative UK companies can access the scale-up capital from (a) pension funds and (b) other sources of funding that they need to grow in the UK.

Answered on

30 September 2020

Building on the success of our £20 billion Patient Capital action plan (announced at Autumn Budget 2017), the Government and regulators have brought forward measures to help ensure the UK’s regulatory environment enables Defined Contribution pension schemes to invest as appropriate in innovative, growing companies. Key actions include:

  • In March 2020, the Financial Conduct Authority updated their rules governing contract-based pensions investment in illiquid assets, which facilitate investment while ensuring effective consumer protection.
  • In September 2020, DWP issued a consultation setting out new arrangements for calculating fees against the charge cap.
  • Through the Asset Management Taskforce, the Treasury has been working closely with the industry to explore the feasibility of a long-term asset fund.
  • A joint Oliver Wyman and British Business Bank report exploring the case for defined contribution (DC) pension scheme investment in venture capital and growth equity.

In addition, the British Business Bank works to unlock long-term patient finance. Since the Government’s response to the 2017 Patient Capital Review, the British Business Bank (BBB) has launched the £2.5bn British Patient Capital (BPC) Programme and the £500mn Managed Funds programme to boost the amount of institutional capital, including from pensions funds, into UK's venture and growth capital markets and channel these funds towards innovative, high-growth businesses and scale-ups.