Northern Gritstone, the new investment company chaired by Lord Jim O’Neill and that aims to support university spin-outs in the north of England, has closed its first fundraising, of £215mln.
Funding commitments have come from a range of investors including M&G Investments, Columbia Threadneedle, Lansdowne Partners, Bruntwood and Greater Manchester Pension Fund and West Yorkshire Pension Fund, among others.
The universities of Leeds, Manchester and Sheffield founded Northern Gritstone last year with the aim of supporting the commercialisation of businesses based on science and intellectual property originating from the three research institutions, tapping into emerging areas of the UK economy like advanced materials, health technology, cognitive computing and artificial intelligence.
Former Treasury minister and Goldman Sachs (NYSE:GS) economist O'Neill chairs the vehicle, and Duncan Johnson, former head of Caledonia Investments' (LSE:CLDN) private capital arm, is its chief executive.
The aim is to raise up to £500mln in capital to invest in early-stage companies.
In the following weeks, the fund's first close will be followed by announcements about its first investments in its proprietary pipeline of science and technology based businesses in the North of England.
“The strong endorsement of Northern Gritstone we’ve seen from investors is testament to the huge scale of the opportunity in northern England’s world class science and innovation hubs and the spin outs they are producing," said O’Neill.
"By investing in Northern Gritstone, asset managers are directly buying into the brightest prospects for Britain’s future economy."
CEO Johnson added, "There is rightly huge excitement about the innovative, science-led spin outs emerging from our leading research universities and the ecosystems they support."
It provides the venture with the opportunity to build a northern innovation hub to compete with the UK's Silicon Fen in Cambridge and ultimately Silicon Valley, he said.
"British universities have a growing reputation for exceptional research capabilities, successful spin-outs and innovation hubs but institutional capital has remained concentrated in the south. The momentum around Northern Gritstone is fuelling a thriving northern venture ecosystem," said head of M&G’s catalyst team Alex Seddon.