The Treasury has announced that Schroders and Intermediate Capital Group (ICG), supported by pensions capital from Phoenix Group, were the winners of its Long-term Investment for Technology and Science (LIFTS) competition.

Announced in the Spring Budget, the government and Phoenix Group are investing £250m each as part of initiative, which aims to generate more than a billion pounds of investment in UK science and technology companies.

Much of this is expected to come from institutional investors, particularly defined contribution (DC) pension schemes, to support the growth of the ‘most innovative’ science and technology firms in the UK.

Schroders Capital, Schroders’ private markets investment division, has announced it intends to launch a UK venture and growth Long-Term Asset Fund (LTAF), subject to regulatory approval, seeded with a cornerstone investment of £300m and open to third-party investors.

It has been awarded £150m by the British Business Bank (BBB) to invest in science and technology companies as part of the LIFTS initiative, which will be matched by Phoenix Group.

Schroders noted that both awards were subject to ongoing commercial discussions and internal governance processes from all parties.

This would be the asset manager's third LTAF, following the launch of Climate+ in March 2023 and Renewables+ in February 2024.

Schroders group chief executive, Peter Harrison, commented: “It is a privilege to have been selected by the BBB to invest these assets into the UK’s leading science and tech start-ups enabling a broader pool of UK investors to benefit from the returns these assets can deliver.

“The UK is one of the most innovative countries in the world, punching above its weight in many sectors, including science and technology innovation. This is why it’s critical we increase investment into these sectors to develop the skills and culture that will benefit savers today and in the future.

“A UK venture and growth LTAF will act as a catalyst to unlock institutional investment, particularly from UK DC pension schemes, and increase the supply of capital to UK technology and science start-ups.”

Phoenix Group chief executive officer, Andy Briggs, added: “Our successful bids into the LIFTS initiative, subject to internal governance processes, is testament to our continued commitment to give our customers access to the potential returns of a broader range of assets, in line with their international counterparts.

“Currently, the UK is significantly behind comparable international markets who typically invest 23 per cent of their pensions in private market assets, compared to 9 per cent in the UK.

“Working in partnership with Schroders and BBB, will give us the opportunity to provide stable, patient capital to the UK’s most innovative businesses to accelerate their growth, whilst delivering potential higher returns to our customers.”

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