Northern Gritstone, the investment business focused on university spin-outs and IP-rich businesses in the North of England, has announced a final close of £312 million, anchored by investments from local authority pension funds.
More than £150m of the funding commitments have been provided by South Yorkshire Pension Fund, West Yorkshire Pension Fund, Greater Manchester Pension Fund, Merseyside Pension Fund and East Riding Pension Fund.
These have been boosted by additional investments from the metro mayors for Greater Manchester, West Yorkshire and South Yorkshire, showcasing the strong local support for Northern Gritstone’s aim to create a hub of technology and innovation in the region.
Chaired by Lord Jim O’Neill and led by chief executive Duncan Johnson, Northern Gritstone has also secured the support of a large number of leading institutional investors including M&G, Columbia Threadneedle, British Patient Capital (part of the British Business Bank), Lansdowne Partners and property investor Bruntwood.
The announcement builds on the momentum that the company has built since its first close in May 2022, which has seen it make initial investments in early-stage businesses and expand its investment team under the leadership of chief investment officer Marion Bernard.
The company has begun to provide funding to some of the North of England’s world-class science and innovation based businesses. It has already announced investments in 15 companies in the region across advanced materials, health technology and AI as part of deals that have contributed nearly £100m in funding.
Northern Gritstone will continue to increase its investments in these areas, tapping into the pipeline of developments in the North of England that include some of the UK’s most exciting future science and technology-enabled businesses.
In its fundraising Northern Gritstone was advised by Lazard Venture and Growth Banking led by Garri Jones. Its legal advisers are Macfarlanes and Pinsent Masons.
“Our ability to raise funding on this scale highlights the support for the world-class science and innovation being developed in the North of England,” Lord O’Neill said.
“Receiving the endorsements of asset managers, mayors and pension funds shows the broad appeal of Northern Gritstone’s offering. It is a show of faith in the potential for growth in the northern economy and a significant step in our development of a technology and innovation hub in the region.”
CEO Johnson added: “For too long, the North of England’s world-class research and innovation has not received the funding it deserves. Today’s announcement is a vote of confidence in both the region and our Profit with Purpose philosophy.
“Our deals have already generated nearly £100m of investment in the North, providing support to some of the country’s most promising businesses. Our investors’ backing will allow us to explore further opportunities across the wider northern venture ecosystem and stimulate growth and job creation in the region.”