Long-term Investment for Technology and Science (LIFTS) FAQs

The UK economy possesses a rich pool of assets in the venture and growth equity space that are ripe for long-term investment. The Government wants to unlock and mobilise the UK’s institutional capital, in particular DC pension schemes, to allow UK investors to benefit from the fruits of UK enterprise. This policy will bring investors together with asset managers, along with the UK Government, to establish innovative funds or investment structures to invest in UK businesses, helping our highest-potential, innovative businesses accelerate their growth while allowing UK savers to potentially benefit from higher returns.

The Call for Proposals invites managed fund proposals from DC pension schemes (or consortia) and authorised asset managers where there is at least one UK DC scheme willing to support the proposal and invest.

Please refer to the LIFTS Call for Proposals for details on eligibility. If you are still unsure, please contact the BBB at [email protected].

BBB will assess proposals in accordance with the assessment process detailed in the Call for Proposals. The assessment process has been designed to enable BBB to select proposals that are considered to offer the best overall value for money in promoting the objectives and meeting the assessment criteria of the LIFTS initiative as set out in the Call for Proposals.

BBB expects an initial government-funded commitment of up to £250m to be available to support successful proposals. Proposals should demonstrate how the LIFTS funding would be used in their response to the Call for Proposals. The British Business Bank has outlined the available support levers.

We will not require proposals to target specific sectors of the economy, though we will welcome proposals that seek to increase investment in our most innovative science and technology businesses.

Applicants should provide detail of the sectors and sub-sectors they intend to invest in as part of their applications. As outlined in the Call for Proposals, we expect proposals to commit to having a significant focus on UK investments in return for government support. At least 50% of the total size of the investment vehicle should be invested in UK-based science and technology companies, and applicants are expected to demonstrate how their investment strategy will deliver this. We will look more favourably on proposals that can demonstrate a greater commitment to UK-based science and technology companies than the minimum set out above.

Useful definitions relating to sectors are included in the Annex of the Call for Proposals.

Yes, but they should demonstrate consideration of the potential issues from operating as a consortium model (such as those relating to ensuring a stable and effective structure) and show that the proposal meets the requirements set out in the Call for Proposals. Applicants must have all appropriate permissions, registrations, and authorisations to raise and operate the relevant investment vehicle.

Yes, applicants may request use of a proportion of the funding available. Applicants should provide a clear and detailed explanation of how the proposal would use the offer of government support up to £250m to achieve the LIFTS Objectives, and how taxpayer value is to be protected and maximised. The BBB and government reserve the right to award successful bidder(s) less than the amounts requested.

No, there is no minimum commitment required, but we would expect strong proposals to wish to make use of a substantial proportion of the funding available to catalyse further investment.

No, applicants may only submit one proposal.

If you wish to submit a proposal, please follow the instructions outlined in the Call for Proposals.

• Applicants should email proposals to the LIFTS inbox, with clear subject heading marked ‘LIFTS Proposal – [Applicant name]’.
• All Respondents will receive an email confirming receipt of their Proposal and details will be provided to Respondents on how to submit supplementary information.
• Applicants should also provide a completed Equity Track Record Proforma using the template provided.
• Any accompanying spreadsheets should be compatible with Microsoft Excel.
• By submitting a Proposal, applicants confirm that they have read and understood the CfP, including the Legal Notice.
• Any questions or clarifications about the content of the CfP should be sent to [email protected].

Written submission should be no longer than 12 pages (including appendices) with minimum size 10 Arial font.

15:00 Friday, 28 July 2023.

For further detail on the process, please consult the LIFTS Call for Proposals.

Any additional LIFTS funding decisions will be made by HMG after initial assessments have been conducted by BBB. In the event that we receive multiple bids of high quality that would collectively require a greater sum of funding than the proposed initial £250m amount, HMG will consider the merits for going beyond this proposed amount on a case-by-case basis.

Please see the Call for Proposals for details. Successful applicants will need to evidence appropriate ethical standards in relation to the proposed investment activity, operations, and general business activities. Applicants should provide detail of the sectors and sub-sectors they intend to invest in as part of their applications.

The Call for Proposals does not exclude bidders who do not have a physical UK presence. An applicant’s investment team will need to have a UK presence of some nature and, other things being equal, proposals with a substantial investment team presence in the UK with a clear commitment for this to be maintained in the long-term will be preferred.

We are seeking proposals from industry for the establishment of new funds or investment structures to crowd in UK institutional investment. Applicants may utilise conventional VC funds, LTAFs or other structures. Applicants must demonstrate how the specific design of the fund/structure meets the particular requirements of institutional investors. Proposals must meet the LIFTS objectives and satisfy the assessment criteria set out in the Call for Proposals.

Applicants must demonstrate the support of at least one UK DC pension scheme (which should be UK based and/or have material control of assets from UK savers, clients, policyholders, or individuals). This support, and other UK institutional investor support, could be demonstrated by either (i) the application directly involving a UK DC pension scheme, either as lead applicant or co-applicant with an authorised asset manager; or (ii) the applicant(s) demonstrating viable in-principle commitments. Examples of evidence of commitment could include letters of support from DC schemes or written proof of intent to invest, but other forms of evidence may be accepted. All other things being equal, more credible demonstrations of commitment from a UK DC pension scheme will be preferred. Proposals should also outline the amount that applicants expect to be committed by the DC scheme(s) involved.

The Call for Proposals invites managed fund proposals from DC pension schemes (or consortia) and authorised asset managers where there is at least one UK DC scheme willing to support the proposal and invest. An authorised asset manager could be internal, so long as the proposal meets the LIFTS objectives and satisfies the assessment criteria set out in the Call for Proposals. Additional external DC involvement would not be a pre-requisite for eligibility in this case, however applicants should note that, all other things being equal, proposals that can demonstrate a stronger catalytic effect in the market will be preferred.

FCA regulated venture capital managers are eligible to apply provided at least one UK DC scheme is willing to support the proposal and invest. Applicants must demonstrate the support of at least one UK DC pension scheme (which should be UK based and/or have material control of assets from UK savers, clients, policyholders, or individuals). This support, and other UK institutional investor support, could be demonstrated by either (i) the application directly involving a UK DC pension scheme, either as lead applicant or co-applicant with an authorised asset manager; or (ii) the applicant(s) demonstrating viable in-principle commitments.

We encourage interested authorised asset managers to make use of existing relationships with DC schemes and use LIFTS as a catalyst for establishing new relationships. The LIFTS team will not be facilitating introductory meetings.

Target Shareholdings refer to the typical percentage of shares that applicants expect to hold in companies, or, in the case of fund-of-fund strategies, funds.

While we are seeking strong evidence of viable in-principle commitments, we appreciate that final arrangements are subject to complex and often lengthy commercial negotiations, and we will take this into account when making our assessment. For further detail on evidence of institutional investor commitment, please see How can I demonstrate support from institutional investors? in these FAQs.

In respect of proposals seeking investment on pari passu terms, Government via the BBB would be able to provide funding in respect of commitments of private sector investors, which may or may not be on a matched basis. Regardless of the basis on which the funding is provided, the BBB commitment can represent no more than 49.9% of the total fund commitments (from all sources, DC pension or otherwise) at any time.

All options will be assessed using the assessment criteria outlined in Section 3 of the CfP, and the BBB and government reserve the right to award successful bidder(s) less than the amounts requested. The exact amount of fund commitments/fee support provided by the BBB will depend on the strength and nature of proposals.

The initiatives are separate but complementary and are both aimed at ensuring there are vehicles to support pension fund investment into assets that support UK growth. The LIFTS initiative is calling for proposals for vehicles to attract pension fund investment into science and technology companies, which the British Business Bank could support. The deadline for proposals to be received is 28 July.

Separately, the Bank is testing whether it uses its capability and opens its pipeline of commercial investments in high growth companies for pension funds and potentially others to invest in.

We are seeking proposals that can demonstrate they would be able to catalyse further investment from the private market if they were successful in receiving support from the Bank/HMG via LIFTS. In this context, “crowd-in” means the commitment of institutional investor capital to the vehicle or vehicles alongside the capital contributed from the LIFTS programme.

The £250m figure refers to the funding expected to be available for the LIFTS initiative to invest into a successful proposal or proposals via one of the support levers outlined in the Call for Proposals – investment on pari passu terms with private investors, investment on subordinated terms or fee support.

As set out in the Call for Proposals, applicants must have all appropriate permissions, registrations, and authorisations to raise and operate the relevant investment vehicle. In principle, proposals may include appointed representative arrangements as part of the overall arrangements for the management of the structure / vehicle. Please note that as BBB is seeking proposals for managed funds, applications will need to include an entity with appropriate authorisation responsible for the management of the fund.

No, there is no maximum number of participants. Consortium bids should demonstrate consideration of the potential issues from operating as a consortium model (such as those relating to ensuring a stable and effective structure) and show that the proposal meets the requirements set out in the Call for Proposals. Applicants must have all appropriate permissions, registrations, and authorisations to raise and operate the relevant investment vehicle.

In line with its usual processes, BBB would look to treat proposals as confidential. However, applicants should note that successful proposals will be subject to government departmental and ministerial sign-offs on a value for money and affordability basis. Accordingly, BBB may disclose information in relation to proposals to HM Government as part of the assessment and approval process.

In addition, applicants should note that public bodies are subject to access to information regimes. As such, information received as part of the LIFTS assessment process may be published or disclosed where required under those access to information regimes. In view of this, if applicants are of the view that any information should be treated as confidential and/or commercially sensitive, it would be helpful if applicants could set out why they consider this to be the case in each instance, so that BBB may take these factors into account when assessing its position under those regimes.

Please see the terms and conditions set out at Section 4 of the Call for Proposals for further detail.