£320 million plan to usher innovation and deliver Mansion House Reforms

The Chancellor of the Exchequer, Jeremy Hunt, and the HM Treasury have published a joint press statement in which they announces some key measures to drive investment in growth in the UK. While most measures are negligeable from the viewpoint of financial market participants, we would like to draw attention to the following measure that has been adopted and that was previously consulted on by UK regulators (please see EventID 20313 and EventID 21384 in this context):
The Chancellor announced the finalization of the Long-term Investment for Technology and Science (LIFTS) initiative which aims to promote large scale institutional and pension scheme investments in venture capital funds that primarily invest in UK science and technology businesses, particularly start-ups coming from UK universities. The government thereby supports these funds with up to £500 million via co-investment. As the Chancellor and the Treasury note, the government has now allocated £250 million to successful bidders to come up with over one (1) billion pounds in investable funds, ready for investment by pension funds. In this context, a new „Growth Fund“ will be established within the British Business Bank (BBB), the government’s own „development bank“ for fostering economic growth and supporting businesses in the UK. Leveraging BBB’s robust history and a consistent capital base exceeding £7 billion, the „Growth Fund“ aims to provide pension schemes with access to promising opportunities in the UK’s most prospective businesses. So far, eight pension schemes and fund managers have acknowledged their interest in the „Growth Fund“.
To conclude, the Chancellor and the Treasury note that they have also launched an initiative to strengthen the UK’s venture capital industry through a new „Venture Capital Fellowship“ scheme, nurturing the next generation of leading investors in VC funds, modeled after the successful U.S. Kauffman Fellowship.