The Prime Minister announced today that £200m from the UK Innovation Investment Fund (UKIIF) will be used to benefit life sciences, digital and advanced manufacturing businesses.
This follows an announcement last month that £125m from the UKIIF will be invested in low carbon and clean tech sectors, bringing the total UKIIF investment to £325m.
The UKIIF today completed first closing on this £200m UK Future Technologies Fund with fund managers the European Investment Fund (EIF). EIF have raised £100m to match Government funding. They will now make their first investments in UK venture funds, investing in technology-based businesses where there are significant growth opportunities, driving the UK economy forward and creating highly skilled jobs.
Speaking to the Global Investment Conference, Prime Minister Gordon Brown said:
“Our new £325 million Innovation Investment Fund – launched as part of Building Britain’s Future – shows our commitment to the industries and the technologies that will create the skilled jobs of the future.
“This fund, seeded by the Government, is bringing private venture capital to growing enterprises. It is already providing £125 million of funding to high tech, low carbon businesses. From today, a further £200 million will be available for life sciences, digital and advanced manufacturing.”
Science and Innovation Minister Lord Drayson said:
"Despite a tough market, the UK Innovation Investment Fund goes from strength to strength. Private funds have matched the Government's investment and money can now flow into promising technology companies. This is just the boost these companies need as the economy returns to growth."
The UK Innovation Investment Fund was announced last June by the Prime Minister as part of the Government’s strategy for Building Britain’s Future. The European Investment Fund and Hermes Private Equity and were each confirmed as fund of fund managers for two separate funds of funds. Backed by £150m investment by the Department for Business, Innovation and Skills, the Department of Energy and Climate Change and the Department of Health, it has already attracted private investment to more than match this amount with the total first closing of £325m.
Chief Executive of the European Investment Fund, Richard Pelly said:
“The leveraging of the UK government’s funds and expertise coupled with our experience in the EU venture capital market will help us to support the next generation of high growth, high tech businesses”.
The Government appointed Capital for Enterprise Limited (CfEL) to advise on the development of the UKIIF and to lead the process of selecting and appointing the investment fund managers. CfEL negotiated the fund with EIF as part of the Government’s continuing drive to support young British businesses.
The UKIIF will target small growing businesses, start ups and spin outs including pre-profit and pre-revenue stages of development.
Evidence shows that venture capital-backed companies significantly out perform other companies in terms of their ability to create wealth and generate the spill-over benefits including export performance and the creation of high skilled jobs vital to the economy.*
Notes to editors
1. The UK Innovation Investment Fund was launched on 29 June 2009.
Hermes Private Equity and EIF were announced as the two fund of fund managers for the UKIIF on 9 December 2009.
2. EIF will be launching a new fund of funds, the UK FTF LP (which stands for the UK Future Technology Fund) using £100m of Government funding alongside commitments of £100m from private sector investors, creating an initial pool for investment of £200 million.
3. * Source – British Venture Capital Association DATA 2008 – the economic impact of private equity and VC in the UK.
Department for Business, Innovation & Skills
The Department for Business, Innovation and Skills (BIS) is building a dynamic and competitive UK economy by: creating the conditions for business success; promoting innovation, enterprise and science; and giving everyone the skills and opportunities to succeed. To achieve this it will foster world-class universities and promote an open global economy. BIS - Investing in our future.
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