Prime Minister And Chancellor Of The Exchequer Launch “Investment Big Bang” To Boost Britain’s Long-term Growth

N News

August 27, 2021

The BVCA shared the recent and significant announcement on the role of investment in the UK’s long term economic growth. The Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak called on UK institutional investors to boost the UK’s long term economic growth through an “Investment big bang”. The letter comes as one of a number of announcements to be expected over the coming weeks on investment, leading to an Investment Summit at Downing Street in October.

 

In the letter to institutional investors, the Prime Minister and Chancellor refer to the “ripe pool of assets for long term investment” and outline how UK institutional investors are currently under-represented in owning UK assets. They have called for an investment big bang to unlock hundreds of billions of pounds from UK institutional investors and recognise the responsibility of government to remove obstacles and costs to making long-term, illiquid investments in the UK. A number of government initiatives are listed in the letter to remove obstacles to investment, including reforming the cap on fees that DC schemes charge, an issue the BVCA has been working closely with the government on.

 

The BVCA responded as follows, “Today’s intervention from the Prime Minister and Chancellor is great news for British pensioners, and a welcome acknowledgement of the value venture capital and private equity investment brings to our country. The industry is the driving force behind many critical innovations in the UK, creating huge economic and social value for our country in the form of jobs, growth and world-leading products and services. This activity has in turn delivered strong long-term returns for investors in venture capital and private equity. In 2019, the 10-year annual return to investors was 14.2%, compared to the FTSE All-Share which returned 8.1% over the same period. But UK pension funds currently comprise less than 5% of fundraising by venture capital and private equity funds in UK. Today’s call to action from the Prime Minister and Chancellor should help UK pensioners benefit from these returns too.”

 

NCM Chief Executive, Kathleen McLeay had this to say about the announcement, "NCM are delighted to see the encouragement by Government to boost the UK's VC and PE market as this can only be beneficial for the UK funds industry.  Most managers have now realised the offshore market doesn’t bring the perceived tax benefits many used to associate with these jurisdictions but does bring increased cost and usually a lower level of service provision. The UK is very well placed to assist managers with their fund structure and administration and NCM look forward to continuing to work with existing and new clients to support their funds’ investments into UK businesses and the economy.”

 

Read the letter here

 

Source | BVCA