UK. Expert calls on pension funds to fill fintech growth funding cap
The author of a major review of UK fintech has called on pension funds to back British entrepreneurs and fill a major growth funding gap in the sector just as government reviews whether to relax restrictions on pension fund investment.
Ron Kalifa, who masterminded the government-commissioned Kalifa Review of Fintech last year, told City AM that pension funds have an opportunity to help British entrepreneurs grow their business domestically and drive job creation rather than selling at the growth stage.
He said: “There is a £2bn fintech growth capital funding gap in the UK, and as a consequence there are many entrepreneurs who prefer to sell at the growth stage rather than build their businesses and create prosperity and jobs in the future.
“There is around £6tn in the UK pension scheme alone. A small portion of that could be diverted to high growth tech opportunities which would create jobs, help with levelling up and drive international trade.”
Recent figures from fintech sector body Innovate Finance revealed a dearth of growth capital for fintech firms. Around $1.6bn was channelled into growth firms last year compared to $7bn for late stage businesses.
The Kalifa Review last year identified pension fund investment as a key lever for unlocking the sector’s growth potential.
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