Here is an article that looks at how the market to fund UK technology start ups is dominated by overseas investors and despite the Mansion House Accord, our pension funds haven’t found their way to opportunities.
Perhaps we ought to get off our backsides and start talking with the businesses who are after funding and invest in the good ones!
Mansion House accord ‘to bridge UK start-up funding gap’
Promising UK start-ups often seek 80% of their capital overseas, science minister says. Can new pension reforms nurture domestic innovation?
Pension and City reforms will help Britain to overcome the “valley of death” funding gap, which drives promising start-ups to seek backing overseas, the science minister has said.
Lord Vallance of Balham, a former government chief scientific adviser and a former senior executive at GSK, said the UK did not lack “excellent science”, rather: “It is definitely a problem with scaling companies.”
He told The Times Life Sciences Summit in London:
“Access to domestic capital is an issue. Our scale-up companies now get over 80 per cent of their capital from overseas investment.
“I don’t mind the fact there’s overseas investment coming in, but we’re losing out on that. That’s why the Mansion House accord on pensions is so important. Get the pension funds releasing capital into that. That is starting now.
“Is it as fast as everyone wants? No. But it’s starting and I really believe that’s going to change quite rapidly.”
The government’s industrial strategy, launched last summer, has ambitions to create Europe’s “leading” life sciences economy by 2030 and the third “most important” globally, after the United States and China, by 2035.
A key part is supporting promising biotech companies to grow in the UK rather than turning overseas, particularly in the United States, to access deeper pools of capital. Vallance also said government procurement could help support scale-ups.
“It shouldn’t be the case that our FTSE 50 basically looks similar to how it looked 20 years ago. Whereas the US one [leading indices] looks dramatically different. We need to have insurgent companies coming up and taking over.”
Confidence in the commercial environment was boosted in April when the government formally finalised a trade deal with the Trump administration, first announced in December, under which Britain has agreed to spend more in exchange for a three-year tariff exemption on UK pharma exports to the US.
About £1 billion of investment in the UK has been announced by three big pharma companies, including AstraZeneca, since the agreement was struck.
However, Doina Ionescu, general manager for healthcare in the UK and Ireland at Merck, who was also speaking at the summit, said:
“In the last few years, we have seen a very punishing commercial environment for the industry.”
She said the UK’s research base
“puts the country at No 2 in the world. However, commercially it has to be rewarding for the companies to invest in this country.”
Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry (ABPI), alongside Lars Petersen, chief executive of Fujifilm Biotechnologies, said the recent medicines spending agreement was a step in the right direction.
Please engage with the companies that excell in this market. But you need to fix the marketing rules, well intentioned but counter prodctive
There are plenty of opportunities but the marketing is restricted to HNW and Sophisticated investors
Try this real example or talk to the speacialist
https://www.pxninvestments.co.uk/
Here is one I did giving more than 60+% return pa over two years and that is before EIS or SEIS. The new roudn will probebly be around 250 per share.
Hi John- sorry for the delay- just needed a min at the computer to focus and make sure I’m giving you the right info. Here’s one I have:
Investment: £99,997.12
Shares: 1,688
Price: 59.24
Total shares issued: 151,250
Date of transaction: 11/02/2021
I have this as EIS compliant if you want the UK tax benefits but I don’t think you really care about that if I recall. It’s there if you want it.
Last priced round was 2023 at 155.18 per share.
John. That sounds all well and good, but the problem we have in the UK because of current political climate is that the accumulation of any amount of ‘Wealth’ gets taxed twice and even more with death and IHT! No wonder that those seeking investment need to look outside the UK as our business’s are not allowed any headroom for investment and even more because our average individual earner is not allowed enough excess to invest without being caught by wealth or capital gains or any other property tax. The tax allowances presently on offer are far too low to attract private investment and these do not keep pace with current inflation! Also, our UK companies that show any financial weakness or wealth are being hunted by overseas equity.
Yes it s frustrating but with EIS and SEIS you have a30-50% tax break on investment and a CGT free disposal and maybe an IHT exception through BPR plus careful structure. You might even use it to raise capital for your own business.
IHT on pensions will damage input and encourage spending it rather than helping the next generation. What’s not to like about a 67% tax break on shopping.
You can’t do nothing about accumulation even CDC needs pots.
Political climate is important and if it is not to your liking change jurisdiction.
There is no IHT in Portugal and for me we voted to stay in Europe and then Cameron decided to ignore that “once in a generation” change. Any one with a pulse could see the damage it would cause and the lies that backed up the leave campaign.