Government to create £1bn fund-of-funds

13 July 2009

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Fund

The UK government has announced plans to launch a £150m fund-of-funds aimed at enhancing the venture capital sector, with the target of scaling up the fund to £1bn with the help of private investors. The UK Innovation Investment Fund has a 10-year lifespan.

Investors

The fund will target institutional investors in the UK and overseas. It has already received interest from approximately five pension funds. The Department for Business, Innovation and Skills, along with the Department of Energy and Climate Change and the Department of Health, have committed £150m into the fund.

Investments

The fund-of-funds will invest in specialist technology funds that focus on growing small businesses, start-ups and spinouts in digital and life sciences, clean technology and advanced manufacturing. The UK Innovation Investment Fund will not have a set minimum or maximum amount for investment, as it intends to support companies at all stages of development.

30% of the UK's high-tech start-ups faced liquidity problems in early 2009. The capital from the new fund-of-funds is expected to provide a significant injection into the market, which only managed to raise less than £200m last year, compared with more than £600m the year before.

People

The UK Innovation Investment Fund has yet to appoint a fund manager.

Name: UK Innovation Investment Fund

Target: £1bn

Focus: Fund-of-funds, specialist technology

Contact: Fergus Harradence

Address: Department for Business, Innovation & Skills, 1 Victoria Street, London SW1H 0ET

Tel: +44 20 7215 5000.