The British Business Bank has announced that Aegon UK, NatWest Cushon, and M&G are the partners for the initial close of the British Growth Partnership Fund I, currently subject to final terms and relevant approvals. All parties have now completed investment “diligence” and are said to be finalising terms and structuring. The British Business Bank is now said to be targeting a first close of £200m by end of the financial year, enabling the fund “to begin investing into high growth UK companies in 2026.”
The British Business Bank said that it now continues to work closely with other investors, including London CIV.
In May, London CIV became the first LGPS pool “to announce its intention to work with the Bank on the launch of the British Growth Partnership, and discussions are ongoing regarding a potential investment into the fund.”
Announced at the International Investment Summit, the British Business Bank is establishing the British Growth Partnership, “encouraging more UK pension fund and other institutional investment into the UK’s fastest growing, most innovative companies.”
The initial fund will seek to raise hundreds of millions of pounds, including a commitment from the British Business Bank, “to invest in some of the highest potential opportunities in the Bank’s venture capital pipeline.”
Louis Taylor, CEO, British Business Bank, said that this announcement brings us one step closer to “mobilising institutional capital at scale into the UK’s fastest growing companies, both diversifying pension portfolios and providing much needed scale up funding.”
The British Growth Partnership will provide access to the Bank’s live pipeline of scale up businesses, providing a vital “bridge between institutional investors and the UK’s thriving venture capital sector.”
We are making strong progress with our initial fund and this news demonstrates the appetite across the full spectrum of pension funds to increase allocations to UK venture capital.
M&G, an international player focused on savings and investments with £365bn in assets under management, has agreed to partner with the British Business Bank on the launch of the British Growth Partnership, with “a view to making an investment at first close, subject to finalising terms and structuring.”
Alex Seddon, Head of Impact and Private Equity, M&G Investments, said:
that they are pleased to be working closely on this important UK growth initiative.
Seddon added that their commitment will build “on the £100 billion we already invest in the UK economy and power up the next generation of high growth UK companies.”
Britain’s businesses need patient capital to truly scale.
By attracting more investment, the British Business Bank is “taking a step to drive growth and strengthen the UK’s position as a hub for innovation.”
Aegon UK said that they are looking forward to partnering with the British Business Bank on the “launch of the British Growth Partnership.”
This initiative aligns with our commitment “to supporting the UK’s most innovative and high-growth companies, while delivering long-term value for our customers.”
NatWest Cushon said that as a signatory to the Mansion House Compact and the Accord, they are committed “to directing investment into innovative, high-growth UK businesses and impact led sectors to deliver better outcomes for our pension savers whilst also supporting the UK’s growth ambitions.”
The British Growth Partnership is “a vital step forward to unlocking these investment opportunities.”
The investment due diligence is complete, and they are eager “to move forward subject to Trustee approval.”
The bank has also unveiled key partnerships with Langham Hall, an established provider of “fund administration, depositary and alternative investment fund management services, to support delivery of BGP Fund I.”
Isio, a UK pensions, investments, employee benefits and wealth advisory business, also provided “support and advice in creating and positioning the fund.”
In November of last year, it had been announced that Aegon UK as well as NatWest Cushon agreed to work cooperatively with the new British Growth Partnership “with a view to making investments in the initial fund.”
In May, the Financial Conduct Authority granted regulatory “approval to BBB Investment Services Limited, the British Business Bank’s third-party arm, to provide investment services to clients.”
The initial fund will have a direct investing strategy, “co-investing alongside the Bank’s network of fund managers.”
The British Growth Partnership will leverage the bank’s position as the late-stage investor into UK firms and the “largest investor” in UK venture and venture growth capital funds.
Investments from the fund will now reportedly be made on a fully commercial basis, independent of government, “leveraging the bank’s capability and market access to invest in a range of UK companies.”
In addition, the bank has announced that it intends “to launch a Venture Link initiative for pension funds.”
This will see the bank release enhanced information on its commitments to venture funds, as part of a package of measures to help pension funds to boost their investment capability, “support them as they develop their strategy, reduce barriers to investment and help to unlock billions more in long-term investment for UK science, technology.”
The bank will now reportedly consult with stakeholders on the “design of this initiative.”
