British Business Bank Launches £600m Growth Fund to Support UK Startups

The British Business Bank is actively working on a plan to launch a new £600m fund aimed at investing pension savings into UK growth companies. The initiative comes as a response to the increasing trend of foreign buyers acquiring promising British businesses, particularly with the surge of investments from overseas venture capital firms, notably from the United States. The British Business Bank aims to foster competition and retain these companies within the domestic market. By seeking proposals from pension funds, the bank plans to create new private sector investment vehicles in which the government would co-invest. The forthcoming budget could unveil the initial partners for the long-term investment for technology and science initiative, known as the Lifts scheme. The push for the new fund aligns with the Mansion House reforms led by Chancellor Jeremy Hunt. Louis Taylor, the bank’s CEO, expressed the need for urgency regarding this matter, stating, We are prosecuting this, the chancellor’s request, with some pace. Taylor believes the growth fund could double the bank’s current yearly investment of £300m in equity and debt. While there are concerns about directing pension cash into high-risk growth companies, Taylor noted the interest from the industry, particularly larger funds. The move aims to strike a balance between raising a meaningful amount of money and ensuring it can be effectively invested. Overall, the British Business Bank’s plan to launch a significant investment fund reflects efforts to support and protect UK startups from foreign acquisitions, while stimulating competition.