Growing our business
In our second year, we have significantly expanded and diversified our portfolio and our team.
During the 12 months to 31 March 2020, we made 11 commitments to new venture and venture growth funds, increasing our total fund investments to 42. These 42 investments are split equally between venture and venture growth funds.*
In terms of investment amount, we committed £405m† in the year to March 2020, taking our total commitments to just over £1bn. Of the £405m, £350m was to new funds and £55m was to existing funds, as they reached further fundraising targets and/or achieved final close.
This level of investment is a significant achievement for British Patient Capital, bearing in mind the company is only two years old. We are also encouraged that the portfolio is generating positive returns at such an early stage. This is a testament to the hard work and commitment of the team.
Innovative high-growth companies in our underlying portfolio.
Spotlight on our portfolio
During 2019/20, we significantly increased our exposure to life sciences with a $65m commitment to SV Health Investors’ first dedicated biotech fund. As a long-term investor, we seek to support best-in-class fund managers as they raise successive funds and build their businesses. Of our 11 new commitments in the year to March 2020, six were to new fund managers and five were to fund managers with whom we had prior commitments.
Aligned with our vision for more home-grown companies to fulfil their potential to be players on the global stage, we also made significant commitments to Balderton Capital’s seventh fund, and Atomico’s fifth fund. Both fund managers are UK-based VCs with large follow-on reserves, thereby enabling them to continue to support their most promising companies well into the growth stage.
This activity translates into an increase in the number of our underlying portfolio companies from 322 to 503, over the 12-month period.
Managing third-party capital
In April 2019, we announced our first third-party investment mandate: £250m on behalf of the Nuclear Liabilities Fund (NLF). The mandate supports the primary objective of the NLF to achieve sufficiency of the fund to meet certain costs of decommissioning EDF Energy’s eight nuclear power stations that are currently operating in the UK.
We look forward to working with a broader range of institutions as we continue to progress our investment strategy.
Enhancing our capabilities and looking to the future
During the year we increased the size of the investment team to 16 professionals, adding investment capacity as well as new capabilities to build our institutional relations and co-investment programmes.
Looking forward, we have a strong pipeline with an increased emphasis on venture growth opportunities.
We will also invest directly, alongside our fund managers, in the most promising later-stage companies in our underlying portfolio, increasing the amount of capital available for the very best later-stage opportunities.
In Life Sciences we will build out our capabilities and appoint a specialist Director.
Catherine Lewis La Torre has been an exceptional leader of the company over the past two years. As I take over the role of CEO from Catherine, I look forward to working with the Board and the team to lead the business and address the challenges and opportunities of the year ahead.
Chief Executive Officer
* Venture funds are typically those investing in early funding stages from pre-seed up to Series A, while venture growth funds invest in Series B onwards.
† All commitment figures include British Patient Capital and third-party mandates.