BERR Becomes BIS... with a New Fund of Funds
Early in June, the UK's Department for Business, Enterprise and Regulatory Reform got a facelift -- merging with the Department for Innovation, Universities and Skills to become the Department for Business, Innovation and Skills (BIS). It also has a new venture capital 'fund of funds' to go alongside the new name.
Last week, BIS announced that it will commit £150m to create the UK Innovation Investment Fund. Private sector investors would be invited to contribute alongside the government with a target to reach £1bn over 10 years.
Peter Mandelson, the First Secretary of State for Business, Innovation and Skills, explained that £100 million of the £150 million will come from BIS, with the remainder coming from the Department of Health and the Department of Energy and Climate Change. The government will invest alongside the private sector on an equal basis.
The UK Innovation Investment Fund is an effort to address a scarcity of funding for VC groups, which claim that hundreds of promising UK VC-backed technology firms could fail because of this year’s credit dry up.
The fund of funds structure means that the UK Innovation Investment Fund will not invest directly in companies. It will invest in a small number of expert technology funds that investing directly in companies with high growth potential. The fund is expected to focus on clean technology, life sciences, digital technology and advanced manufacturing.