BVCA awaits British Business Bank boost

The British Private Equity & Venture Capital Association is hoping for concrete details on a national investment fund when the UK chancellor Philip Hammond hands down the Budget on Wednesday.

We are anticipating a significant announcement on the future of the British Business Bank, which is vital given the uncertainty around how the European Investment Fund will operate post-Brexit.

The Government must avoid the cliff-edge risk that the EIF simply withdraws from the UK market without notice before 2019.

In September the Government recommended the establishment of a new national investment fund to invest in patient capital, to be managed by the British Business Bank. We fully support this proposal and so [on Wednesday] we are hoping for some more flesh on the bones.

Increasing the number of larger venture and growth capital funds in the UK by attracting additional institutional investment should be the key aim of the fund. This will improve the industry’s ability to support companies over the long-term by taking meaningful stakes in businesses over multiple funding rounds, including the larger, later-stage funding rounds associated with scaling up a business.

The Government should seek at least to match the EIF’s investment in UK equity finance and we would like see new National Investment Fund launched as quickly as possible.

We would also encourage the Government to give its full support to the tax-advantaged venture capital schemes (Enterprise Investment Scheme, Seed Enterprise Investment Scheme and Venture Capital Trust) and make improvements within the current EU State Aid Framework. Significant sums have been raised from retail investors through the schemes and they have played an important role in providing early stage funding for companies. SEIS, EIS, VCTs are well-established programmes that resonate well with investors and investees and this is a significant achievement after many years of government support.

The BVCA is the industry body and public policy advocate for the private equity and venture capital industry in the UK.