Schroders Capital has launched its third long-term asset fund (LTAF), which will focus on UK venture capital in the technology and life sciences sector.
This LTAF, which has received approval from the Financial Conduct Authority, will offer DC schemes and other institutional investors the opportunity to participate in the growth and development of these UK early-stage companies.
Schroders Capital will invest across companies across a number of areas, including those involved in artificial intelligence, quantum computing, fintech, cybersecurity and oncology.
The fund will be seeded with a cornerstone investment of £300m. Half of this has come from Phoenix and half from The British Business Bank, as part of the UK Government’s Long-term Investment for Technology and Science (LIFTS) initiative.
Phoenix has previously announced a partnership with Schroders, after announcing it would be investing in institutions capable of invigorating UK life sciences companies.
LTAFs are relatively new vehicles, designed to enable DC schemes to invest in more illiquid assets, allowing them to take advantage of the robust returns and diversification benefits of private markets. Schroders Capital is the $97.3bn specialist private markets business of the asset manager. It offers access to private assets through its range of listed vehicles, as well as semi-liquid and illiquid structures – and launched the UK’s first LTAF in April 2023.
Schroders Capital’s private equity team has a long standing track record in venture capital investing with almost three decades of early-stage technology and healthcare investment experience. The team also has significant experience in the UK, having invested £1.3bn into around 1000 UK companies to date.
Schroders Capital head of private equity investments Tim Creed says:“The UK is the largest venture capital market in Europe and a key global innovation hub.
“This fund will allow a broader range of investors to benefit from the next technology revolution and access innovative companies driving long-term mega trends. With the UK being home to a growing number of unicorns and our ability to invest through the full lifecycle, we can tap into the best companies with high growth potential on behalf of our investors.”
Schroders head of UK DC Tim Horne adds: “Supporting the UK Government’s Mansion House reforms, this fund will help unlock the potential for DC schemes to invest into fast-growing, early-stage companies. These investors have so far been underweight private markets, venture capital and UK businesses in particular.
“Schroders has been an innovator in providing UK DC investors with access to private markets, having launched the UK’s first LTAF last year. This will be the UK’s first dedicated vehicle for DC investors to access venture capital.
“UK savers will be able to benefit from the potential returns and investment diversification that these innovative sectors can provide, whilst also backing homegrown businesses.”