Future Planet Capital recently hosted its inaugural Partner Day at the spectacular Institute of Directors in London. The day provided an excellent opportunity to engage with our network and the investment ecosystem, sparking conversations around how we might better position the UK as a global hub for innovation, and reap greater rewards from our most promising high growth businesses and best-in-class research and development facilities.
Our Executive Chairman, Douglas Hansen-Luke, set the tone for the day: "We do not only need to have great ideas. We need to accelerate and scale up companies. Those that raise money most regularly are the ones that succeed and win.”
At Future Planet Capital, we have frequently engaged with entrepreneurs, investors and asset managers in the UK and further afield, as well as those in the pensions and insurance industry. From this, we know there is consensus amongst all parties on the need to both improve the UK’s funding environment, and to do so with urgency.
With that, our Partner Day also served to progress these discussions while unearthing answers to the following questions: how do we build a supportive investment ecosystem in Britain? And what can we do now to help the UK accelerate its journey towards unlocking venture capital investment into its most promising scaleups?
The first step is relatively straightforward. We need to stop talking about impact investment and start doing it. At Future Planet Capital, we are led by impact, backing growth companies that are solving the world’s greatest challenges.
But it so happens that these impactful companies are often able to create the best returns. Integrating impact and societal value into investor business models and portfolio strategies is, therefore, crucial. As one of our insightful panelists, Katie Fulford-Smith, succinctly summarised, by ensuring effective collaboration between LPs and GPs we can better implement the frameworks needed for the efficient allocation for impact.
This is something we have worked hard to do here at Future Planet Capital, as our Impact Lead, Alex Shadbolt set out in the first of four panel discussions on the day: Impact Investing: Future Planet Capital’s inaugural Impact Report.
We’re striving to push the industry forward, by adopting new impact frameworks, collaborating with other investors and sharing our insights, and showing commitment to novel initiatives in impact, such as 1000 Ocean Startups’ Ocean Impact Navigator tool.
However, even with a firm commitment to impact in place, it is important that investors are directing capital to where it’s most needed. The world faces countless challenges – disease and pandemics, water scarcity, biodiversity loss, and food security are but a few.
But while all these areas deserve investment, climate change is thought to be the greatest global threat facing the world this century. As such, it is essential we move fast to find a solution to the climate crisis.
This topic was centre stage during the second panel discussion of the day, which focused on The Blue Economy: the state of our oceans, challenges, and opportunities, and was led by Future Planet Capital’s Head of Global Ventures, Ed Phillips.
As Ed made clear, if protected, our oceans hold great potential for curbing the repercussions of climate change, purely through their natural capabilities. They already produce 50% of the world’s oxygen, and absorb 30% of global carbon dioxide emissions, for example. And if leveraged, ocean-based climate solutions have the potential to reduce the emissions gap by up to 35%.
But if we are to truly unlock the potential of our oceans in the climate race, we must focus our investment on innovation in the blue economy – which, at present, sees only a fraction of all climate finance. In the UK, blue investment opportunities already exist. One of Future Planet Capital’s most exciting portfolio companies, Rovco, is already making waves in the offshore wind sector through its advanced subsea robotics and integrated survey solutions.
Of course, looking beyond the ocean economy, opportunity in the UK can be found across all industries and sectors. The third panel discussion of the day focused on Scaling Britain: supporting our most promising science and technology scaleups.
The UK is steeped in science and technological innovation – from building the steam engine to developing the Oxford-AstraZeneca COVID-19 vaccine, which was aided by Barinthus Biotherapeutics (formerly Vaccitech), one of Future Planet Capital’s portfolio companies.
We punch well above our weight. And yet, at present, many of our most promising science and technology companies are pushed abroad or held back by a lack of funding.
As Haas School of Business’ Jerome Engel argued, we mustn’t neglect our previous successes. This is a lesson the UK can take from Silicon Valley in the US, where the lifeblood is not magic – as many might believe – but a history of entrepreneurialism, perseverance, and commitment to innovation and growth.
The UK’s investors and entrepreneurs alike should look to apply this same attitude, which we at Future Planet Capital know exists, to work together in creating a solutions-based platform that encourages investors to invest, and innovators to innovate.
The UK’s approach – in particular, from its pension funds – to venture capital and private markets has a crucial role to play here. This theme was discussed in the fourth and final panel discussion: Venture Capital in the UK economy with the BVCA’s Chris Elphick.
We know that pension funds need to invest more in venture capital if we are to accelerate growth and scale as a matter of urgency. We’ve seen some progress over the past 12 months, stemming from the Chancellor’s Mansion House reforms last July – some of our largest pension funds pledged to invest 5% of portfolios into venture. However, many pension funds appear unable to step beyond an outlook of caution.
A necessary step is to bring the conversation around venture capital and private markets to the fore, whether that be through industry events, government pledges, or media. To some degree, the industry is still deemed cloudy, filled with risk and uncertainty, and it is crucial to reverse this narrative.
More than this, to further abate these feelings of caution amongst pension funds, we must leverage the abundant expertise of early-stage investors, both based in the UK and beyond, that is at our disposal.
In creating working partnerships between venture specialists and pension funds in the UK, we will be able to funnel the necessary capital towards the scaleups with the greatest potential, not just to deliver returns for individuals, businesses and the economy, but also to drive positive change through impact.
We’d like to thank everyone who attended our Partner Day. In particular, a special thanks to those who shared their expertise and insight at each panel discussion.
The conversations that were had throughout the day were hugely productive, and shed light on what we as an investment community must do next.
Most importantly, though, we need to move faster in putting these words into action. Future Planet Capital looks forward to continuing its work in supporting businesses create impact through solving the world’s greatest challenges, and driving the UK’s journey towards becoming a global hub for innovation.