CEO Update - 18 November 2024
Mansion House show pension reform unstoppable as Chancellor visits BIA member
Last week was a watershed moment as Rachel Reeves, the chancellor of the Exchequer delivered her first Mansion House speech to commit the government to radically reform UK pension funds to support to support growing businesses in the UK – including life science companies – a key BIA strategic objective.
This has been a long-term mission of the BIA in reforming the financing landscape for our start-up and scaling members and is also vital for the future of life science venture capital in the UK.
Steve Bates OBE
CEO, BIA
I met with the Chancellor as she visited BIA ember Quell Therapeutics last week to explain what and why she was doing this to the business media, this six-minute Bloomberg TV interview with the Chancellor is the best summary of what moved last week and has the benefit of the Chancellor in a BIA members labcoat.
Pension reform – how the cash will move into our sector
The Chancellor made her formal speech at the Mansion House on Thursday evening. Alongside this key press releases and documents were published, including one from the British Business Bank explaining how key pension provider Aegon UK has committed to cornerstone investment to the British Growth Partnership and NatWest Cushon have agreed to work with the British Growth Partnership. Another gave details on how British Business Bank will work with Schroders Capital, the $97.3 billion specialist private markets business, to begin making investments before the end of the year.
This investment vehicle – called LTAF - will offer defined contribution and other institutional investors the opportunity to participate in the growth and development of groundbreaking UK late-stage companies focused on technology and science with 20% of the fund expected to be invested in life sciences. It is particularly good to see Georg Wunderlin, CEO of Schroders Capital backing our sector saying:
“The UK is home to some of the most innovative early-stage technology and life sciences companies in the world. This significant cornerstone investment from British Business Bank and Phoenix will encourage further domestic investment in these key growth sectors, enabling these companies to maintain their edge and continue to innovate from here in the UK.”
Pensions – our view is accepted as the government’s view
The Pensions Review Interim report was also published, and it included a very interesting analysis. Crucially for us, it says: “The government is concerned by the evidence that UK pension funds are investing significantly less in the domestic economy than overseas counterparts. For example, DWP analysis has found that there is a 30-percentage point gap in the amount of home investment across asset classes in UK DC funds compared to Australia. There is clear evidence of a sustained pattern of withdrawal by DC and LGPS pension schemes from UK-listed equities for at least the last decade. The Review will therefore use its next stage to consider whether further interventions may be needed by the government to ensure that these reforms, and the significant predicted growth in DC and LGPS fund assets over the coming years, are benefiting UK growth.
Further UK government evidence makes the case that “domestic risk capital for unlisted start-up companies in the UK remains a challenge for later stage funding rounds. This creates an ‘equity gap’ in the UK economy due to a mismatch in the supply of and demand for financing. Pension funds with long-term horizons and sufficient scale and expertise (detailed in Chapter 4) may be well positioned to access strong domestic investment opportunities, particularly at potential companies when they arise and ensure they are sufficiently capitalised to generate their full economic potential.”
It’s great to see the detailed evidenced policy case we’ve been advocating for years reflected in the evidence underpinning the policy announcements by the government and this shows how a long-running campaign can make a real difference. There is still a long way to go but last week was a key moment for us – thanks to all who have helped us get this far.
London Life Sciences Week underway
It's London Life Sciences Week this week and it was great to celebrate the launch of it with many of you at the opening reception at Bush House last night.
London Life Sciences Week is Europe’s largest and most influential coming together of global life science investors and innovative companies. And November before Thanksgiving is the key European moment in the global sector’s calendar, akin to the JPM conference in San Francisco each January.
The UK is the world’s third global sector for life science – in investment (40% of all European biotech VC investment), innovation (35% of European start-ups) and London, as the third best global city for a life sciences company.
Exciting companies like Bicycle Therapeutics, Isomorphic Labs, Quell Therapeutics, and RoslinCT are some of the visible headliners of a vibrant ecosystem of innovation. DJS Antibodies, acquired by Abbvie, and Ochre Bio's deals with Boehringer Ingelheim and GSK, show global companies value UK innovation and will pay big money for it.
The 2024 edition follows the UK government’s announcement that they are reforming the UK pension system, with the UK's biggest pension fund Phoenix signing a deal with Schroders on a new £500 million private fund that will allocate 20% and Aegon cornerstoning the British Growth Partnership, with further commitments from Natwest Cushon and more to come.
It was great to partner with London & Partners yesterday - the first time the BIA has held an event on a Sunday in the UK - and it was great to see a large number of members alongside international guests flying in early for a key week of business.
And it's not too late to join us tomorrow, Tuesday 19 November for the BIA and BioCentury's CEO & Investor Dialogue at 5:30-9 pm at the Law Society, 113 Chancery Lane, London.
bioProcessUK in Liverpool this week
From London, I’ll be heading to Liverpool for the bioProcessUK conference this week joining over 350 colleagues for one of the friendliest events on our BIA calendar. I was delighted to see the news that Elanco Animal Health Incorporated has completed the purchase of the TriRx plant on Fleming Road in Speke in Merseyside for $25 million. This means hundreds of jobs have been saved. Steve Rotheram, Mayor of the Liverpool City Region, who will join us at bioProcessUK this week, said:
I strongly welcome Elanco's decision to ensure the TriRx site remains open and that jobs are secured. We are proud of the historic growth that the life sciences sector brings to the Liverpool City Region. I will continue to work with Elanco, Liverpool City Council and the Government, to ensure the long-term viability of the site.
Other news in brief
Lots of other news out this week I can’t do justice to but important to note developments in engineering biology, by NICE on timelines and from UKRI regarding postgraduate funding - see UKRI invests £5.8 million to drive growth in the engineering biology sector while a new study shows NICE Advice support can reduce appraisal timelines by three months and over 4,700 newly funded post-graduate places in UK universities will create a new generation of engineers and scientists.
