Technology Scandinavian pension funds invest more in UK start-ups than...

Scandinavian pension funds invest more in UK start-ups than British counterparts


- Advertisment -

Scandinavian pension funds are investing more cash in UK start-ups than their British counterparts, data shows, as Jeremy Hunt battles to boost funding in homegrown tech companies.

Pension funds from the Nordics, Denmark, Finland, Iceland, Norway and Sweden, have invested $88m (£70m) in venture capital funds in the UK and Ireland this year, according to investment firm Atomico.

In contrast, UK and Ireland pension funds have committed just $49m.

Mr Hunt, the Chancellor, has been pushing British pension funds to put more of their assets into tech start-ups, saying it could support growth and mean better returns for savers.

Despite attracting more venture capital investment than any other country, much of Britain’s funding comes from overseas, meaning UK investors miss out on any gains.

Atomico’s State of European Tech report found that across Europe, UK and Ireland, pension funds invested $52m last year, just 5pc of total pension investment.

UK and Irish tech start-ups, in comparison, raised $32bn – several hundred times more than what pension funds were investing.

Funds in the Nordics, where investing rules have been liberalised in recent years, and the US accounted for more than half of all pension investing.

2305 UK pensions fund allocation

The Government has for years been trying to convince pension funds, often denounced as lethargic and overly resistant to risk, to back fast-growing tech companies.

Major pension funds including Aviva and Legal & General agreed earlier this year to put 5pc of their assets in start-ups, a move that Mr Hunt said could make savers £1,000 better off a year.

Last week, the Chancellor said he would set up a scheme to train science and technology investors, based on the successful Kauffman Foundation in the US.

Atomico said pension funds were most likely to avoid start-up investing because of “a lack of relevant experience of investing in the asset class, the relative perceived risk to other asset classes, and regulatory [or] legislative constraints”.

The report also found that US tech investors are retreating from Britain and Europe, having led much of the funding boom in recent years.

American funds have invested just 58 cents for every dollar invested into UK start-ups by European investors this year. Two years ago, the figure was 86 cents.

Overall, Britain attracted more start-up funding than any other country, although the gap is shrinking. $12.6bn has been invested into UK start-ups this year, 59pc more than second-placed France. Last year it was 76pc more.


Please enter your comment!
Please enter your name here

Latest news

- Advertisement -

Must read

Lady Gaga and Cardi B Meet at the Grammys

What was expected of her was the same thing...
- Advertisement -

You might also likeRELATED
Recommended to you