Phoenix invests in venture capital firm using money from with-profits funds
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Phoenix Group has acquired a stake in the holding company of Hambro Perks on behalf of its with-profits funds, in an attempt to help savers access venture and growth capital as an investment class and diversify their portfolios.
The acquisition price is undisclosed.
Hambro Perks is a UK-based venture and growth investor that currently holds stakes in over 135 companies in Europe, the US and the Middle East across nine funds, all addressing new technologies, including fin-tech, healthcare, life sciences and environmental technologies.
The investment will enable Phoenix to invest directly alongside Hambro Perks into venture and growth capital.
James Mitchell, head of strategic partnerships at Phoenix Group, said the investment will give with-profit funds access to “some of the fastest growing and most innovative companies” in the UK and overseas.
“We believe it’s important to enable long-term savers to invest in more diversified portfolios that give them access to the potential returns of a broader range of assets,” he said.
Mitchell added: “At the same time, investments of this nature can help to support economic growth, levelling up across the UK and facilitating the development of new technology that will enable the UK to respond to the climate change challenge.”
The investment in Hambro Perks builds on a long-standing relationship between the two companies, Phoenix said.
Andrew Wyke, chief executive at Hambro Perks, welcomed Phoenix as one of his firm’s largest shareholders.
“This is an important development for Hambro Perks as we continue to deepen our partnership with the UK’s largest long-term savings and retirement business. We are great admirers of Phoenix, and we are strongly aligned in our vision that a thriving venture and growth capital ecosystem can benefit both UK Plc and our respective investors.”
According to Phoenix’s half-year results this week, the insurer holds 19% of with-profits business in its £269bn assets under administration.
Separately, a report published by Barnett Waddingham about with-profit funds’ investments revealed that all UK with-profits funds from participating insurers (Phoenix was not part of the research) experienced a negative return due to economic downturn, with the average return being -11.7%.
The main risk that most funds view as likely to affect asset allocation continues to be geopolitical risk, according to the consultancy.
It said: “Compared to previous years, central bank actions and domestic political risk are much higher on funds’ radars this year.”
Barnett Waddingham’s analysis covers 68 funds across 24 insurers.
Do you see the need to review your asset allocation for your with-profits policyholders?
