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Strategic report

Investment strategy

Our focus is on the venture growth stage of the market.

Committing to best-in-class fund managers

We seek best-in-class fund managers with a strong UK focus.

We look to build long-term relationships. When working with emerging managers, we seek out those with the long-term vision and potential to raise successor funds.

Through our investments we enable the best managers to execute their planned strategy more effectively, and often to a greater scale. We achieve this by making a cornerstone commitment to enable a first close, or by boosting a fund to achieve optimal size.

Portfolio construction

We are building a diversified portfolio by sector, stage and vintage. We invest in both venture and venture growth funds. 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.

The majority of our investments are in fixed-term vehicles, a reflection of market availability, though we are open to more innovative structures, particularly those providing evergreen or perpetual capital.

A focus on venture growth

Our focus is on the venture growth stage of the market. Over time, we expect our portfolio, in terms of both funds and underlying companies, to increasingly reflect this. We are now invested in 21 venture funds and 21 venture growth funds.

We will continue to make some investments to funds focused at the earlier stage, to help build a pipeline of later-stage investment opportunities. We also look to managers with the track record and scale to raise large, multi-stage funds with sufficient reserves to support companies through multiple funding rounds.

As part of this focus on venture growth we have also invested in a number of Opportunities Funds – funds which invest further capital into existing portfolio winners. We will also invest directly, alongside our fund managers, in the most promising later-stage companies in our underlying portfolio.

Our fund managers

Case study

Oxx Fund I

£25m investment – August 2019

Oxx is a UK-based venture growth investor, backing software-as-a-service (SaaS) companies at the scale-up stage. Oxx has a particular interest in five key themes: data convergence and refinery, the future of work, financial services infrastructure, user empowerment, and sustainable business. Oxx currently manages £100m in total, including co-investment funds.

Launching as a spin-out from Amadeus Capital in 2017 with a veteran founding team, Oxx faced fundraising challenges common to emerging managers. As a first-time fund manager, Oxx fell outside the remit of most institutional investors in the venture capital asset class.

British Patient Capital’s rigorous due diligence and deep understanding of the venture capital landscape allowed it and Oxx to facilitate a strong partnership. The process resulted in a refined business plan and investment strategy, and a due diligence set that Oxx could replicate with other prospective investors.

“British Patient Capital’s cornerstone investment in our first fund was critical, as it ensured we achieved a speedy first close, and were able to quickly capitalise on the venture growth opportunity. The British Patient Capital team has been at the front-line of venture capital and growth investing for years, and therefore bring a lot more than just money to the table.”

Case study

Atomico V

$50m investment – January 2020

Atomico is a venture capital firm backing ambitious mission-driven European founders at Series A, with the fund size to follow on in subsequent growth rounds. With a team of founders, investors and operations specialists, and founded in 2006, Atomico has partnered with over 100 teams. The firm currently has $2.7bn in assets under management.

Atomico V raised $820m, receiving backing from a global institutional investor base; British Patient Capital played an important role with a significant commitment of $50m.

Atomico seeks to be an active proponent of the UK and European technology ecosystem. Its Conscious Scaling programme, an open-sourced framework for founders to identify and mitigate long-term risks, requires companies to commit to implementing a Diversity and Inclusion policy as part of their investment term sheets.

As a limited partner, British Patient Capital provides Atomico with an investor aligned with its mission, principles and values, particularly on important issues such as diversity. In addition, it can be a strong partner to continue to support UK-based technology successes through direct investment, providing further capital to support these companies on their journeys to success.

“LP support is vital to the success of a strong and healthy tech ecosystem. British Patient Capital has been a critical component of this in the UK. British Patient Capital’s focus on diversity and inclusion is well aligned with Atomico’s mission and values, making it a strong partner for us.”

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