£2.5bn British Patient Capital Programme launched to enable long-term investment in innovative companies across the UK
- British Patient Capital fulfils the Chancellor’s 2017 Autumn Budget commitment and one of the outcomes of the Patient Capital Review
- British Patient Capital will support UK businesses with high growth potential to access the long-term financing that will enable them to grow into world-class businesses
- Investing alongside the private sector, British Patient Capital will support £7.5bn of investment for British businesses
- British Patient Capital will be seeded with c. £400m of existing and approved venture and growth fund commitments including two new investments announced today
- £30m evergreen investment announced in venture capital firm Draper Esprit plc
- £9m investment in the Dementia Discovery Fund announced, a specialist venture fund creating new medicines for dementia
- Anne Glover CBE and Russ Cummings appointed Non-Executive Directors
The British Business Bank is launching British Patient Capital, a new £2.5bn programme designed to enable long-term investment in high growth potential companies across the UK led by ambitious entrepreneurs who want to build successful, world-class businesses.
The creation of the £2.5bn programme is one of the key outcomes of the Patient Capital Review. Announced by the Chancellor at Autumn Budget 2017, the programme is an important element of the Government’s Industrial Strategy. It will support UK businesses with high growth potential to access the long-term financing they need to scale up. By investing alongside the private sector, British Patient Capital will support a total of £7.5bn of investment for British businesses. British Patient Capital will be developed as a separate subsidiary of the British Business Bank with a view to future sale into the private sector with an established portfolio and proven track record.
The British Business Bank’s Venture Capital Catalyst programme’s existing and approved commitments of c. £400m will be transferred to British Patient Capital, allowing the new programme to start with a strong track record of commitments to venture and growth capital funds. Among the investments being transferred are:
- A £30m cornerstone investment in venture capital firm Draper Esprit’s £115m capital raise. This will be the programme’s first evergreen investment, expanding the market for long-term investment in the UK. Completion of this investment is subject to Draper Esprit shareholder approval.
- A £9m investment in the Dementia Discovery Fund, a specialist, 15-year life venture capital fund that invests in novel science to create meaningful new medicines for dementia. The fund benefits from a diverse range of strategic investors including charity, pharma, public and significant private investors.
Rt Hon Philip Hammond MP, Chancellor of the Exchequer, said: “The UK is home to some of the world’s most innovative companies and I want to make sure that they stay at the forefront of the tech revolution. So, British Patient Capital will provide an extra £2.5 billion for these cutting-edge businesses ensuring Britain remains one of the best places to start and grow a company.”
Rt Hon Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy, said: “Through our modern Industrial Strategy, we are working to support companies both large and small to scale-up and maximise their potential. British Patient Capital will make a valuable contribution to this aim, helping to build Britain’s status as the best place in the world to start and grow a business and ensuring UK firms can access the long-term investment they need to succeed.”
The British Business Bank has significant experience as both an institutional investor and supporting a diverse patient capital market. Its Enterprise Capital Funds (ECF) programme has an investment capacity of £1.1bn of funds and helped grow several start-up funds into major names in the venture capital market. The Bank’s Chief Executive Keith Morgan has been appointed as the Chairman of British Patient Capital.
Keith Morgan, Chief Executive, British Business Bank and Chair of British Patient Capital said: “A major barrier holding back the continued development of young innovative firms is access to longer-term investment. The lack of this patient capital slows these firms’ growth and holds back the UK’s productivity. British Patient Capital has been created in consultation with Government and the finance community to help ensure that high potential, high growth businesses can access the long-term finance they need to build the UK’s innovation economy.”
Simon Cook, CEO, Draper Esprit plc said: “Having invested in businesses such as Perkbox, Lyst, Graphcore, Graze and, more recently, Revolut, we have a strong record of working with ambitious UK start-ups throughout the country, from Bristol to Newcastle and Cambridge to Belfast. As such, we are delighted to be working with the British Business Bank and their British Patient Capital programme to provide UK start-ups with the investment they need to scale up and become the Googles, Facebooks and Amazons of tomorrow.”
Two non-executive directors have been appointed to the Board of British Patient Capital:
- Anne Glover CBE, CEO and co-founder of Amadeus Capital Partners Limited joins British Patient Capital as a Non-Executive Director today. Anne has recently been appointed a Non-Executive Director to Court of the Bank of England. Anne was a founder of Calderstone Capital Ltd, and was Chief Operating Officer of Virtuality Group plc. She is a Member of both the Council for Science and Technology, and a former Chairman of the BVCA and Invest Europe.
- Russ Cummings, former CEO, Touchstone Innovations plc, one of the UK’s leading technology investment companies, championing outstanding science by commercialising innovative research from UK universities, joins British Patient Capital as a Non-Executive Director. Russ brings more than 25 years’ experience as a venture capital and private equity investor having worked for Scottish Equity Partners LLP and 3i Group plc.
More information and documentation for prospective fund managers is available on the British Patient Capital website www.britishpatientcapital.co.uk
Existing proposals that qualify under the existing Venture Capital Catalyst programme will now be processed under the British Patient Capital programme.
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Notes to Editors
About the British Business Bank
The British Business Bank is the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Our remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank is currently supporting almost £4bn of finance to more than 65,000 smaller businesses and participating in a further £6.6bn of finance to mid-cap businesses (as at September 2017).As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses. It has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). This guide impartially sets out the range finance options available to businesses – from start-ups to SMEs and growing mid-sized companies. Take the interactive journey at www.thebusinessfinanceguide.co.uk or download/print a copy.
More information, including a legal structure chart for British Business Bank plc and its subsidiaries, can be found on the British Business Bank website.
As the holding company of the group operating under the trading name of British Business Bank, it is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA.
About British Patient Capital
British Patient Capital is the trading name of British Patient Capital Limited, a subsidiary of British Business Bank plc. Its mission is to enable long-term investment in innovative firms led by ambitious entrepreneurs who want to build large scale businesses. British Patient Capital is a £2.5bn investment programme designed to support high growth potential innovative UK businesses in accessing the long-term financing they require to scale up.
The existing Venture Capital Catalyst programme is a programme of British Business Investments Ltd. British Patient Capital Limited and British Business Investments Ltd are commercial subsidiaries of British Business Bank plc.
British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.
About the Patient Capital Review
Some of the UK’s highest potential, most innovative start-ups can struggle to scale-up because of a lack of long-term finance. Enabling greater access to patient capital is a key element of helping high-growth start-ups reach scale, and of funding capital-intensive research & development-based businesses. The success of these businesses can play a vital role in the UK’s future economic growth.
The government consulted on potential barriers to accessing finance and the means to overcome them as part of the Patient Capital Review. The Patient Capital Review concluded in Autumn 2017, and in November’s Budget, the Chancellor announced an action plan to unlock over £20 billion to finance growth in innovative firms over 10 years. This plan allocated additional resources to the British Business Bank in response to the Patient Capital Review.