British Business Investments announces €120m commitment to LGT Capital Partners funds
British Business Investments, a commercial subsidiary of the British Business Bank, announced the third commitment through its £500m Managed Funds Programme.
The commitment to LGT Capital Partners, split across two funds, is the largest to date from the Managed Funds programme, which acts as a cornerstone investor into large scale venture and growth capital funds of funds. The material commitment will support LGT Capital Partners’ first investment vehicles dedicated solely to venture and growth capital in Europe.
By taking a cornerstone position, capital from British Business Investments can help attract significant, additional volumes of private institutional investment into funds which in turn invest in venture and growth capital opportunities.
This approach also serves to diversify the venture and growth capital investor base, providing fund managers with more fundraising options. It enables institutional investors to access the asset class via an established manager such as LGT Capital Partners, with the skills and experience to build a diversified portfolio. Ultimately this will increase the amount of funding available to innovative, high growth companies across the UK and Europe, enabling them to scale-up and compete globally.
The investments from the funds will focus on early and late stage opportunities in the information technology and healthcare sectors. With an investment strategy that includes a significant proportion of co-investments, additional capital will be available for some of the most promising later-stage companies.
Catherine Lewis La Torre, CEO of British Business Investments, said: “LGT Capital Partners is a global institution that invests over the long-term. With its strong private markets heritage and a well-established venture and growth capital investment capability, these new funds are well aligned with the strategic aims of the Managed Funds Programme. By supporting LGT Capital Partners’ first funds dedicated solely to European venture and growth, we will not only enable venture fund managers to access new, and deep pools of institutional capital, but also send a strong signal to other global institutions that this asset class, in the UK and Europe, can provide compelling returns. This new commitment will support later-stage innovative businesses across the UK with the capital they need scale-up and compete on the global stage”.
Ivan Vercoutere, Managing Partner at LGT Capital Partners, said: “Our investors, alongside LGT Capital Partners, have benefited from our extensive network and 20 year investment history in the European venture capital ecosystem. While the UK remains a leading destination for innovation and venture capital, Europe has emerged as an integrated venture capital ecosystem consistently producing globally leading technology companies. With the support of the BBI, we look forward to further expand our commitment and support of European innovation and growth.”
Launched in 2018, the Managed Funds Programme forms part of the Government’s response to the Patient Capital Review and, alongside British Patient Capital, is designed to address the patient capital funding gap in the UK. By targeting a commercial rate of return, the long-term aim of the Programme is to demonstrate the attractiveness of longer-term, later-stage venture and growth capital investments for institutional investors. Access to these sources of patient capital will allow ambitious companies to reach their full potential and help ensure that the UK remains as the best place to start-up and scale a business.