The UK pension industry should increase their allocation to domestic investments to university spinouts to avoid missed opportunities, Oxford Science Enterprises CEO, Ed Bussey, has said.

Speaking at the Pensions and Lifetime Saving Association (PLSA) Investment Conference 2025, Bussey stated that the university spinouts would like to see more UK domicile money, particularly from the pension industry, come to this asset class.

“Without it, the bulk of the money is coming from outside the UK and creates a gravitational pull for these companies to leave the UK,” he explained.
 
Bussey said that investors from the U.S. and other countries are already investing in UK university spinouts.

However, he noted the UK itself is not investing as much, which could lead to missed opportunities for local growth and innovation.

He also acknowledged that although from a business or economic standpoint, relocation may be justified, ensuring the UK remains a competitive hub for innovation should be a priority for local investors.

Northern Gritstone Investment Management chief executive officer, Duncan Johnson, echoed this sentiment, highlighting the dual benefits of such investments.

“In terms of driving the growth agenda, we benefit from investments having a phenomenal amount of local impact as well as giving market-leading returns,” he said.

“That is why it is so powerful as an investment product; you get the profit but you get the purpose.”

Railpen portfolio manager, Julia Deiz, stressed the need for collective action in this area, stating it was “pretty clear” that UK capital needs to come together to support the growth of UK companies to make the asset class as successful as possible.

Bussey emphasised that “now was the time” for pension funds to invest in high-growth science and technology companies.

Despite this, a poll conducted during the sessions showed that pension professionals remain hesitant.

A poll conducted during the session revealed that 48 per cent of pension professionals said their biggest concern about investing in high-growth science and technology companies such as university spinouts was a lack of familiarity with the underlying technologies.

In addition to this, 29 per cent said the risk profile of individual science-based companies was their biggest concern, 15 per cent said long hold period limiting liquidity, and 8 per cent said management fees of funds managing the investments.

However, almost four in 10 (39 per cent) pension professionals said that supporting cutting-edge innovation in the UK economy was an attraction of investing in this sector, while 39 per cent said it was enhancing their portfolio returns with the addition of high-growth assets.

Under one in 10 (17 per cent) said the biggest attraction was the societal impact from innovation such as healthcare, and climate, while 4 per cent said supporting economic growth in their region.

When asked in which ways they would like to see this investment class explored, 58 per cent of pension professionals said case studies of high-impact and high-performance companies, 28 per cent said learning more about different fund structures and opportunities for co-investment, and 14 per cent said reports on financial performance.

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