Pension funds to catalyse growth in Life Sciences companies?
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We've seen a lot of activity in the past week around how the UK government plans to galvanise growth in innovative companies (summary here).
As I wrote a couple of months ago, only by focusing on all stages in the growth cycle of a Life Sciences company can four £20bn+ UK companies be created in the next 10 years.
It seems that the UK government is getting on-message with this – both through its Budget and its response to the Patient Capital Review. There are a number of meaningful proposals which have been welcomed by industry, such as tax relief changes and government-backed investment funding.
But one of the most exciting proposals appears under those headlines – unlocking the potential of pension funds to invest long-term in the scaled-up Life Sciences companies of the future.
Pension funds have the ability to catalyse the establishment of new £20bn+ UK Life Sciences companies.
If managed well, a flow of substantial investment into Life Sciences companies from those funds - which are committed, long-term investors - could help ensure the growth of such companies at all stages of development, leading to properly scaled-up entities.
That investment may well also encourage those companies to seek an IPO on UK markets, rather than (for example) NASDAQ. Already in 2017, at least three UK Life Sciences companies have chosen NASDAQ over UK markets - a trend we've seen in recent years. It could change easily with the right investment and market conditions.
Of course, the biggest factor at play here will be enabling pension funds to invest - ensuring the right framework to permit them to do so, and the right environment to encourage that. It will be interesting to see how this proposal develops in the coming months - watch this space.