M&G Investments and Schroders are among the major asset managers seeking to run a proposed £1 billion UK Scale-Up Fund designed to channel pension capital into high-growth British science and technology companies. The initiative, announced in July 2026 with government backing and support from the British Business Bank, is intended to expand the pool of domestic growth capital available to promising UK businesses. Several other investment firms, including managers focused on earlier-stage companies, are also understood to have entered the process.
A New Vehicle for UK Growth Capital
The proposed fund brings together some of the country's largest pension providers as policymakers look for ways to connect long-term savings with investment opportunities in innovative British businesses. Pension investors supporting the initiative include LPPI, Border to Coast, Railpen and Nest, with the British Business Bank working alongside participating institutions and intending to invest in partnership with the group. The fund is expected to focus on companies with the potential to scale rapidly, commercialize new technologies and generate skilled employment across the UK.
Asset Managers Enter the Race
M&G Investments and Schroders have emerged as two prominent contenders to manage the vehicle, according to reporting by Sky News, although neither firm commented on the process. Their interest highlights the potential significance of the mandate, which would give the selected manager responsibility for deploying a substantial pool of institutional capital into British growth companies. A wider group of asset managers has also applied, suggesting strong competition for a role at the center of the government's effort to strengthen the domestic scale-up financing market.
Keeping High-Growth Companies in Britain
The initiative comes amid persistent concern that successful UK startups can struggle to secure sufficient late-stage financing at home, increasing the risk that they relocate abroad or sell to overseas buyers as they mature. Government officials have positioned the Scale-Up Fund as one response to that financing gap, with Prime Minister Andy Burnham arguing that pension investment can support entrepreneurs, technology development and economic growth across the country. Chancellor John Healey has similarly presented the fund as a way to direct more British capital toward British scale-ups while seeking stronger long-term outcomes for pension savers.
British Business Bank Supports the Initiative
The British Business Bank is providing administrative and financial support as the participating pension schemes explore the creation of the vehicle and select an external fund manager. When the initiative was announced on July 27, the government said a market-engagement process would begin shortly, inviting asset managers to express interest in managing the proposed fund. The structure reflects a broader policy push to mobilize institutional investment for innovation while giving pension funds greater exposure to potentially successful private UK companies.
Key Details Still to Be Decided
Important elements of the Scale-Up Fund remain unresolved, including the precise investment criteria that companies will need to meet before becoming eligible for backing. The final manager will also play a significant role in determining how capital is allocated across sectors, stages and individual opportunities while balancing policy ambitions with the investment objectives of pension providers. The selection process will therefore be closely watched by founders, investors and policymakers seeking evidence that the initiative can translate institutional commitments into meaningful growth financing.
The competition involving M&G, Schroders and other asset managers marks the next stage in turning the £1 billion Scale-Up Fund from a policy initiative into an operating investment vehicle. If established as planned, the fund could create a substantial new source of domestic capital for high-growth science and technology businesses while increasing pension schemes' participation in the UK's innovation economy. Its ultimate impact, however, will depend on the manager selected, the investment framework adopted and the quality of companies able to attract capital from the fund.
Source: Sky News