VC firms pledge to seek UK pension fund investment in boost to UK start-ups

20 of the UK's venture capital firms have today signed the “Venture Capital Investment Compact” - a pledge spearheaded by the BVCA to boost UK pension investments in unlisted equities. The VC firms have voluntarily committed to invite UK pension funds as limited partners in their funds, as well as to increase engagement between them with a view to encouraging pension funds to deploy capital into the dynamic private market in the UK. 

The Compact follows on from the Chancellor's speech in July earlier this year in which he announced that nine UK defined contribution pension providers had agreed to allocate 5% of their default funds into unlisted early-stage and private-equity type equities, with a view to investing £50bn of capital by 2030. 

Increasing the diversity of the pool of potential investors in VC firms, and thus potentially the amount of capital available to be deployed, should be welcome news to founders and early-stage companies seeking VC investment in the UK. Whilst VC firms may need to adapt to meet the requirements of pension funds, that may be a small price to pay for such a significant boost to the funds at their disposal.