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Innovate Finance releases statement on British Business Bank Future of DC Pensions Report

Written on 25/09/19  by Innovate Finance

Charlotte Crosswell, CEO of Innovate Finance, comments:

“The findings from the British Business Bank report highlight huge potential for the UK FinTech & Tech sector, should defined contribution pension scheme investment be encouraged into venture capital and growth equity.

It is reassuring to see the total number of employees enrolled in the workplace pension in 2018 rise to 18.7m, and simultaneously that the case for venture capital and growth equity is growing stronger. The VC industry has its challenges, such as its associated high risk, and the time/skill required to make smart investments. Encouraging patient capital into venture could hugely outweigh the risks, especially for the rapidly growing UK FinTech sector. The report clearly shows that the global VC and GE market has outperformed the stock market on average by 7% since 1970, placing it in a strong position to attract funding.

Despite the challenges, there are solutions. Liquidity risk for example, can be kept to a minimum, and seeding an investment vehicle with an existing portfolio can mitigate the risk further. If the UK FinTech and tech industries are to go from strength to strength, industry and government must come together and do whatever they can to support DC scheme investors.

France announced last week that it is encouraging patient capital into venture, so it is time that the UK follows. If we don’t, we risk losing our leading position on the global tech stage. We have to help fund and grow our FinTech and tech unicorns to ensure they remain successful and leaders in the sector.”

For full details on the report, click here: