New fund to help close £6.5bn private equity gap
The University of Cambridge has launched its eighth Enterprise Fund, managed by university spinout fund manager Parkwalk in conjunction with Cambridge Enterprise.
Parkwalk has now overseen more than £100 million of investment into Cambridge-based companies over the past eight years.
This new fund is timely as more investors consider startups for their potentially strong returns. Despite interest from investors remaining robust, the Enterprise Investment Scheme Association has found that more than £6.5 billion of private sector equity investment is still desperately needed.
First launched in 2012, the Enterprise Funds offer alumni, people associated with the university and investors the opportunity to back companies spun out of Cambridge in a tax-efficient manner through the Enterprise Investment Scheme.
From August 2012 to December 2020, the University of Cambridge Enterprise Funds I through VII have achieved 11 realisations, generating over £9m. These include Quethera, which was acquired by Astellas for up to £85 million in 2018, creating a significant return for one of the UCEF funds.
Parkwalk’s Cambridge funds have invested over £14m over the eight years in operation and have generated attractive returns to date.
The objective of the Enterprise Fund is to invest in a portfolio of early-stage, high-growth, knowledge-intensive companies spun out from the university, across sectors such as artificial intelligence, big data, life science, materials and quantum computing.
Both Cambridge Enterprise and Parkwalk believe university spin-outs are a unique asset class in early-stage and growth investing.
The technologies are well-tested, with strong IP protection, developed by leading experts in their field, and are often seeking to solve the world’s greatest challenges, with a natural alignment to ESG and social returns, as well as generating financial returns.
Cambridge is one of Europe’s most productive technology clusters having spawned 18 unicorns – private businesses valued at $1bn and over. And the university has been central to growing Cambridge’s globally influential science & technology community.
Dr Anne Dobree, Head of Seed Funds for Cambridge Enterprise, said: “The University of Cambridge Enterprise Funds have been an important source of funding for our young companies and are a great way for Cambridge alumni and friends to support the university’s innovation. Parkwalk has been a valued partner since the launch of these funds and has played a huge role in their success.”
Moray Wright, CEO of Parkwalk, added: “During a time of immense global change we are delighted to be managing the University of Cambridge Enterprise Fund VIII.
“It’s been eight years since the first UCEF fund and I’m glad Cambridge has been such an integral part of our investment journey. Cambridge is one of the world’s great universities and has an unbeatable pedigree in innovation.
“Cambridge is the source of the jet engine, the structure of DNA, monoclonal antibodies, genomics sequencing and plastic electronics. The Cambridge Enterprise Fund VIII takes advantage of the UK’s world-leading position in R & D and our position as the most active investor into UK university spinouts.”