The Government now has a stake in 265 British companies after Future Fund loans converted into equity.
The £375 million corporate finance scheme was launched in May 2020 in response to the coronavirus pandemic.
Under the scheme, the Government could co-invest with private investors to support research and development (R&D) intensive firms that were impacted by Covid-19.
The Government investment was made in convertible loans, which convert into equity if the loan cannot be repaid in time.
The initiative was launched alongside the Coronavirus Business Interruption Loan Scheme (CBILS) after research suggested that breakthrough companies “typically require more capital than other technology companies to fuel the later stages of their growth”.
According to the British Business Bank (BBB), the Future Fund issued 1,190 companies with Convertible Loan Agreements worth more than £1.1 billion before closing on 31 January 2021.
As of 31 December 2021, 265 of these loans had converted into equity shares, meaning the Future Fund now holds an equity stake in 265 of the UK’s most innovative firms.
Commenting on the report, Ken Cooper, Managing Director at the BBB, said: “The Future Fund was created to increase the flow of capital to innovative companies at the height of the pandemic, while ensuring long-term value for the UK taxpayer.
“We’re delighted to see so many companies already going on to raise further private sector capital. As a shareholder in so many promising businesses, the Future Fund is well positioned to share in the benefits of their continued growth.”
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