Schroders Capital, a private markets business, has completed the first £500 million close of its UK Innovation Long-Term Asset Fund (LTAF) for investment in early-stage UK companies, particularly in AI and technology.
The LTAF framework, authorised by the Financial Conduct Authority, the UK’s financial regulator, is designed to enable UK pension schemes to invest in illiquid assets with longer-term horizons, historically out of reach for such investors.
The fund has already made its first two investments in Synthesia and Luminance, two UK-based AI firms. The first-of-its-kind LTAF has attracted commitments from investors including British Business Bank and Phoenix, through its private markets venture Future Growth Capital.
According to the provider, the fund’s success reflects growing interest from defined contribution pension schemes and institutional investors in supporting the UK’s innovation landscape.
The LTAF aims to accelerate the growth of early-stage UK technology and life sciences firms, aligning with the government’s Long-Term Investment for Technology and Science initiative. It focuses on AI, cybersecurity, fintech, vertical software-as-a-service, biotech, and oncology, among other global innovation themes.
UK and US asset managers eye LTAF launches
Synthesia, an AI-powered video communications provider, will use the investment to expand globally, supporting its growth in Japan, Australia, Europe, and North America. Schroders Capital has backed the company previously through its co-investment partner MMC Ventures.
Luminance, an AI provider in the legal space, will leverage the funding to expand its Cambridge R&D hub and grow operations in the US, Asia Pacific, and Europe.
“The UK remains a hub for European innovation. We are pleased to complete our first close with a strategy dedicated to nurturing this vibrant innovation landscape,” said Tim Creed, head of private equity investments at Schroders Capital. “This milestone underscores pension schemes’ interest in forward-thinking investments. Early-stage UK businesses will play a crucial role in shaping the future of the UK economy.”
Harry Raikes, private equity investment director at Schroders Capital, added: “Our first two investments showcase our confidence in the UK and AI. Synthesia is set to revolutionise content creation, while Luminance leads in legal AI for enterprise. Both firms already serve Fortune 100 companies, demonstrating market conviction in these businesses.”
Paul Forshaw, CEO of Future Growth Capital, commented: “We’re delighted to be a founder investor in the UK Innovation Fund, helping to grow the UK businesses of the future on behalf of UK pension savers.”
