27 December 2019: British Patient Capital establishes itself as a major player in UK venture and venture growth markets: Investing in 12 funds with £334m of new commitments in its first year
Catherine Lewis La Torre, CEO, British Patient Capital, said:
“In our first year, British Patient Capital committed a total of £334m to 12 venture and venture growth capital funds. Together with the seed portfolio acquired, our total portfolio consisted of 31 fund investments at the end of the financial year, representing total commitments approaching £600m. These funds had invested in 322 underlying businesses at financial year end. This activity establishes British Patient Capital as the largest domestic investor in venture and venture growth capital in the UK.
“The UK provides a fertile ground for innovative companies to thrive but lack of access to patient capital has prevented many of these companies from scaling up and fulfilling their full commercial potential. British Patient Capital will facilitate greater availability of long-term finance to help build the UK’s innovation economy.
“By demonstrating to the market that a long-term patient capital investment strategy can achieve attractive returns, we aim to encourage more investors to make allocations to this asset class.”
In its first financial year, British Patient Capital has delivered strongly against its business plan:
Achieving an attractive rate of return for the UK taxpayer
- The total portfolio Internal Rate of Return stood at 13.3%.
- Gross return on capital employed was 8.2%.
Helping address the funding gap as companies scale up
- British Patient Capital acquired a seed portfolio of investments from British Business Investments in July 2018.
- We made 12 new commitments with a total value of £334m in 2018/19 financial year.
- Total number of portfolio commitments was 31 and the total value of portfolio commitments was almost £600m.
- Notable transactions during the year include:
- £30m cornerstone investment in listed venture capital firm, Draper Esprit
- £33m cornerstone investment in IQ Capital Fund III to back early-stage deep tech businesses
- £50m investment in the Dawn Capital Opportunities Fund to further support its highest potential businesses
- Portfolio funds have invested in 322 underlying companies.
- Seven themes feature in our portfolio of underlying companies, including AI and big data (25%), digitisation (18%), life sciences and digital health (15%) and the future of finance (13%).
Working with institutional investors to unlock additional patient capital
- We signed our first £250m investment management mandate with the Nuclear Liabilities Fund. Signposting and providing access to venture and venture growth capital investment as an asset class for institutional investors is a key objective.
Keith Morgan, Chair, British Patient Capital, said:
“Our mission is to enable long-term investment in innovative companies across the UK, led by ambitious entrepreneurs who want to build successful, world-class businesses. Our long-term vision is for more home-grown and fully-funded companies to fulfil their potential to be players on the global stage. With £2.5bn of funds to invest into venture and venture growth capital funds over the next decade, British Patient Capital is working alongside institutional investors with the aim of attracting a further £5bn of patient capital investment, unlocking £7.5bn of finance. In our first year, we have made strong progress, making a significant number of commitments to funds and quickly establishing British Patient Capital as an important player in the UK’s venture and venture growth markets.”
About British Patient Capital
British Patient Capital is the trading name of British Patient Capital Limited, a wholly owned commercial subsidiary of British Business Bank plc, the UK government’s economic development bank. It forms part of the British Business Bank’s commercial arm.
Its mission is to enable long-term investment in innovative companies across the UK led by ambitious entrepreneurs who want to build successful, world class businesses. British Patient Capital has been given new resources of £2.5bn and will deliver a programme designed to support high growth potential innovative UK businesses in accessing the long-term financing they require to scale up. Find out more at britishpatientcapital.co.uk.
British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. Neither British Business Bank nor its principal operating subsidiaries are authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc websiteLink opens in a new window.