Schroders has invested £100 million in growth companies on behalf of pension funds, backing autonomous vehicle unicorn Wayve and deeptech darling ElevenLabs among others. This marks the UK's first venture capital vehicle specifically designed for pension investments.
UK Innovation LTAF's Second Funding Round
Schroders Capital announced on Wednesday that it had deployed over £100 million into British-based tech and life sciences scale-ups through its UK Innovation Long-term Asset Fund (LTAF). This structure gives pension funds access to early-stage companies. The funding round primarily consisted of cash from local government pension schemes and is only the second of its kind for the LTAF, following a £500 million fund last year supported by Standard Life and the British Business Bank.
Other unicorns backed in this round include Cambridge spinout Luminance and gene therapy venture Aavantgarde Bio. Harry Raikes, head of UK venture investments at Schroders Capital, stated: "These companies are at the forefront of high-impact, world-class innovation, tackling enduring social need – from critical research into medical therapies, to powering the future of our essential industries."
British Pensions' Push into Private Markets
This round signifies a major milestone for Britain's pensions sector, which has been navigating a government-backed initiative to invest more in non-listed British companies over the past two years. The Treasury has been working to unlock billions of pounds in savings for British firms, aiming to provide savers exposure to fast-growing companies and source capital for investment-starved businesses.
This push led to the Mansion House Accord last year, where 17 of Britain's largest pension funds agreed to ring-fence 5% of their workplace portfolios for private markets and infrastructure investments in the UK. Traditionally, British pension funds have been among the most risk-averse globally, allocating significant portions to bonds and fixed income while avoiding riskier private markets. In contrast, pension funds in Canada and Australia are major venture capital investors, prompting calls for British firms to emulate their foreign counterparts.
The UK Innovation LTAF was established in 2024 by Schroders and Standard Life (then Phoenix) to address this imbalance. Its first £500 million round backed AI-powered video platform Synthesia and drug development scale-up Draig Therapeutics.
Chancellor Rachel Reeves commented that the LTAF's latest round would help "bridge the gap between the UK's investment pools and the high-potential firms that will help drive the next phase of growth across the UK."
