UK on course to create Europe’s largest technology venture capital fund

10 December 2009

The UK government has announced the appointment of Hermes Private Equity and the European Investment Fund (EIF) as fund of funds managers for the UK Innovation Investment Fund (UKIIF).

The fund will invest in innovative British businesses in key sectors including life sciences, clean technology, digital and advanced manufacturing.

The government’s investment of £150m has leveraged £175m in additional money, creating a pool of funding initially worth £325m. Further private investment will be secured before the fund closes for investors in 2011, a statement said. The ambition remains to create a billion pound 15-year fund.

The government will invest £50m in a £125m low-carbon and clean tech fund-of-funds to be managed by Hermes. These complementary mandates invest across all technology sectors and at all stages.

It will also invest £100m in a £200m technology fund-of-funds to be managed by the EIF, which will cover digital/ICT, life sciences and advanced manufacturing.
Lord Drayson, Science & Innovation Minister, said, ‘UKIIF has been a hit with investors. We can now ensure that Britain’s high tech growth companies will have the capital to fulfil their potential. By backing entrepreneurs we back jobs and growth.’

Simon Walker, chief executive of The British Private Equity & Venture Capital Association (BVCA) said, ‘This is terrific news for UK venture capital. To achieve £325m in less than six months after the fund was announced is very impressive, particularly in the current climate. This will be much needed investment for the young, innovative businesses which will create jobs and opportunity in our future growth areas. It is these venture-backed companies that can be at the vanguard of the UK’s economic recovery.’

The intention to create the UK Innovation Investment Fund was announced by the UK Prime Minister on 29 June as part of the government’s strategy for Building Britain’s Future. The Department for Business, Innovation and Skills, Energy and Climate Change and Health will invest £150m on a ‘pari-passu’ basis. The UKIIF will operate through two funds of funds structures which means that it will not invest directly in companies, but rather in a small number of specialist technology funds that have the expertise and track record to invest directly in companies with high growth potential.

Hermes Private Equity is owned by Hermes Fund Managers, one of the most established and largest institutional fund managers in the UK with over £20.5bn under management. Hermes Private Equity has been investing globally in primary partnerships since the 1990s, and has over £1.5bn assets under management in private equity funds and over £400m assets under management in infrastructure funds and direct deals. Hermes annually commits up to £400m to primary funds from venture capital to large buy-outs predominantly in the US, Europe and Asia.

Copyright © 2009 NewNet

Tags: fund of funds, private equity, venture capital

This story was published on Thursday, December 10th, 2009 at 2:02 pm and is filed under Europe, funds. You can follow any responses to article entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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