The Department for
Business, Innovation and Skills will today take the next step in
setting up the UK Innovation Investment Fund (UK IIF) – a venture
capital fund of funds to support the UK’s technology companies –
just one month after securing cornerstone investment for the Fund.
Capital for Enterprise Ltd will release the Request for Proposals
(RFP) for prospective Fund of Fund managers for the UK IIF. The
RFP is a key milestone in delivering the Fund as it sets out the
parameters for the fund and details the information expected from
prospective Fund of Fund managers.
The RFP will ask potential Fund Managers to target the sectors of
the future, such as life sciences, low carbon, digital and
advanced manufacturing. Success in these sectors is key to the
Government’s industrial strategy set out in New Industry New Jobs,
and will create the highly skilled jobs as Britain emerges out of
the global downturn. The RFP will also ask Fund Mangers how they
will raise money from private sector investors to create the
largest technology Fund in Europe.
The UK Innovation Fund was spearheaded by Lord Drayson, Minister
for Science and Innovation, to drive economic growth and create
jobs by investing in technology-based businesses with high growth
potential. The new fund will focus on investing in growing small
businesses, start-ups and spin-outs, in strategically important UK
sectors including digital and life sciences, clean technology and
advanced manufacturing.
The Fund was announced by the Prime Minister on 29 June as part
of the Government’s strategy for Building Britain’s Future. The
Departments for Business Innovation & Skills, Energy and
Climate Change and Health will invest £150 million alongside
private sector investment on a pari-passu basis. It is the
Government's ambition to leverage enough private
investment to create a £1 billion 10 year fund.
The UK Innovation Fund will safeguard the Government’s record
investment in science over the past decade by demonstrating the
wealth-generating potential of the UK research base. It will
leverage substantial private sector investment and will boost the
venture capital and syndication markets in the UK at a time when
they are most vulnerable.
A seminar for potential investors and Fund of Fund managers has
been arranged to explain the Government’s objectives and to
clarify the process for setting up the fund. The seminar will take
place in the City on 6 August.
Contacts:
BIS Press Office: Laure Thomas, 0207 215 5938,
laure.thomas@bis.gsi.gov.uk
For further information or a copy of the RFP please visit http://www.capitalforenterprise.gov.uk/ukiif
or email: UKIIF@capitalforenterprise.gov.uk
Notes to Editors
1. The UK Innovation Investment Fund is part of the Government’s
plans for Building Britain’s Future. For more details, visit:
www.hmg.gov.uk/buildingbritainsfuture
2. All the indicators suggest that the total amount of venture
capital invested in early stage technology companies will be
significantly reduced in 2009. The UK Innovation Investment Fund
will be one of the largest ever technology funds in Europe.
3. Key facts:
There are about 1,093 venture capital backed technology
companies in the UK employing over 40,000 highly skilled
people.Venture capital backed companies significantly out perform
other companiesUK employment increased by 6% compared to a
national average of 1%Sales grew by 12% pa compared to 5% for FTSE
Mid-250 companiesIncreased R&D expenditure of 12% compared
to 1% paValue of exports from the UK increased by 14% compared
with 4% nationally69% of venture backed companies introduced new
products or servicesHousehold names such as Google, Vodafone,
E-Bay, SKYPE, Amazon, Microsoft and Apple were backed at an early
stage by venture capital.
4. The Fund will operate on a Fund of Funds structure which means
it will not invest directly in companies, but rather invest in a
small number of specialist technology funds that have the
expertise and track record to invest directly in companies. The
Fund will only invest in those companies that have strong survival
and growth prospects.
5. The Government will seek to appoint an experienced Fund of
Funds manager with a proven track record in technology investment.
They will be regulated by the Financial Services Authority (FSA)
and will require the necessary authorisations to operate in the
UK.
6. A Fund of Funds structure proved most attractive to
institutional investors, as it creates a portfolio approach that
spreads the investment risk across a number of different
technology fund management teams. The Fund of Funds approach also
enables the Government to support the growth of the market without
distorting or competing with existing fund managers and ensures
that the Fund complements existing public sector interventions
such as Enterprise Capital Funds, RDA European Development VC
Funds as well as tax measures.
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.
Contacts:
BIS Press Office
NDS.BIS@coi.gsi.gov.uk
Laure Thomas
Phone: 020 7215 5938
Laure.Thomas@bis.gsi.gov.uk