Head of UK venture talks to PMP about the aim of channelling DC pension capital into high-growth technology and life sciences companies.
Schroders Capital is accelerating deployment from its UK Innovation LTAF, committing more than £100m across 19 investments as it seeks to channel defined contribution (DC) pension capital into high-growth UK companies.
Harry Raikes, head of UK venture investments at Schroders Capital, told PMP that the strategy prioritises returns over rapid deployment, despite a competitive venture environment.
The long-term asset fund (LTAF), positioned as the first structure of its kind for UK venture capital, reached a £500m first close last year with backing from investors including the British Business Bank and Standard Life via Future Growth Capital. It has since attracted additional commitments from Local Government Pension Schemes.
The strategy targets early-stage technology and life sciences businesses, with exposure spanning artificial intelligence, fintech and biopharmaceuticals. Schroders Capital combines direct investments with fund commitments and secondaries to build a diversified portfolio across stages and vintages.
Initial investments include companies such as AI voice platform ElevenLabs and biotech group AAVantgarde Bio, reflecting a focus on high-growth sectors aligned with the UK’s innovation agenda.
The launch comes amid ongoing policy efforts to unlock pension capital for private markets, including the UK government’s LIFTS initiative, and growing expectations that DC schemes will increase allocations to domestic private assets over time.
Explore how private markets allocations are being utilised at PMP’s Defined Contribution Forum.
The fund has already committed £100m across 19 investments. How are you balancing deployment speed with valuation discipline in what’s still a competitive UK venture market?
Raikes: Our UK Innovation fund is return-focused, not pace-focused. Because the strategy can invest across direct investments, primary funds and secondaries, we have the flexibility to focus on the highest-return opportunities across the company lifecycle rather than forcing deployment into any one part of the market. We will move quickly when conviction is high, but only at valuations that we believe properly support our return targets.
We believe the UK offers a particularly attractive opportunity set as Europe’s largest venture market.
Harry Raikes, Schroders Capital
There’s long-standing industry talk about DC pension capital flowing into venture. What’s changed this time, and how much of that £500m first close is new-to-VC money?
Raikes: What has changed is both the structure and the policy backdrop: the LIFTS initiative, the LTAF regime and broader reforms have all played a role in supporting further DC access to private markets. Today, the fund has grown to £570m and includes £250m from Standard Life, via Future Growth Capital, its joint venture with Schroders, alongside £250m from the British Business Bank and commitments from Local Government Pension Scheme investors, including the London Borough of Lambeth Pension Fund.
Institutional Investment Conferences & Summits from Longview Networks
LTAFs are designed for long-term capital but DC schemes still face liquidity pressures. Is this relevant as schemes grow? How are you managing that tension in a venture strategy?
Raikes: That is exactly why the LTAF matters. Venture needs long-term capital, while DC schemes need a structure that can better accommodate ongoing subscriptions and liquidity management. The semi-liquid, evergreen format is designed to bridge that gap.
Schroders is positioning this as unlocking access to UK innovation. What evidence is there that this sector/structure will deliver competitive returns versus global VC benchmarks?
Raikes: Despite the early encouraging signs, we would be cautious about drawing strong conclusions on fund performance at this stage. The stronger evidence lies in the foundations of the strategy: it builds on Schroders Capital’s approximately three-decade venture investing track record, deep global network and long experience backing high-growth technology and life sciences businesses.
We believe the UK offers a particularly attractive opportunity set as Europe’s largest venture market. For us, the core proposition is not about short-term marks, but about applying a long-established venture investing approach to a market with strong underlying fundamentals and significant long-term potential.
With a heavy tilt toward AI and life sciences, how are you thinking about concentration risk, especially given current hype and valuation levels in those sectors?
Raikes: We manage concentration risk through portfolio construction. The portfolio is diversified by stage, structure and sub-strategy across seed, venture, growth and life sciences, with a mix of direct investments, fund investments and secondaries. We want exposure to the UK’s strongest innovation areas, but with disciplined portfolio construction and valuation control.