Business Investments commits up to EUR75m to new Isomer Capital fund of funds aimed at early stage VC managers
British Business Investments Ltd, a commercial subsidiary of the British Business Bank, has made its fourth commitment through its GBP500 million Managed Funds Programme.
The cornerstone commitment of up to EUR75 million is being made to manager Isomer Capital’s second fund, Isomer Capital II, which will be targeted at early stage venture capital managers across Europe, that invest primarily into early stage tech companies. Isomer II will also pursue a co-investment strategy, investing alongside its fund managers, with additional capital made available for the most promising, high-growth companies from the underlying portfolio.
By taking a cornerstone position, capital from British Business Investments can help attract significant, additional volumes of private institutional investment into funds which in turn invest in venture and growth capital opportunities.
This approach also serves to diversify the venture and growth capital investor base, providing fund managers with more fundraising options and enabling institutional investors to access the asset class. Ultimately this will increase the amount of funding available to innovative, high growth companies across the UK and Europe, enabling them to scale-up and compete globally.
Judith Hartley, CEO of British Business Investments, says: “Isomer Capital is a good example of a new breed of specialist fund of fund managers that we are starting to see emerge in the UK. Isomer Capital is the only UK headquartered, 100% venture focused fund of funds manager, with an entirely UK based team. The team has venture capital at its core, blending both entrepreneurial and investment experience. With a focus on early stage managers, this commitment will bring diversity to the Managed Funds programme at the investment level, whilst supporting earlier-stage innovative businesses across the UK with the capital they need to scale-up and compete on the global stage”.
Joe Schorge, Managing Partner of Isomer Capital, says: “We are thrilled to launch Isomer II with the support of British Business Investments, alongside existing and new institutional partners from Europe, Japan and the US. Today’s entrepreneurs are powered by stronger ambition, innovation, and technology than ever, and the Covid-19 crisis highlights how vital their solutions are for business and society. Isomer Capital II follows the same investment strategy as its predecessor, which has diversified exposure to over 600 high-potential technology companies in 30 countries, including some of Europe’s most well-known unicorns.”
Launched in 2018, the Managed Funds Programme is designed to address the patient capital funding gap in the UK. By targeting a commercial rate of return, the long-term aim of the Programme is to demonstrate the attractiveness of longer-term, later-stage venture and growth capital investments for institutional investors. Access to these sources of patient capital will enable ambitious companies to reach their full potential and help make the UK a great place to start-up and scale a business.