The new UK National Wealth Fund: a change of focus for the British Business Bank?

The Government earlier this week announced its intention to establish a National Wealth Fund (NWF). The plan is for two existing public finance institutions – the UK Infrastructure Bank and the British Business Bank (BBB) – to operate under the NWF umbrella, with a renewed focus on investments in decarbonisation technologies. 

BBB has been a significant investor over the last decade in private funds investing in or lending to UK SMEs. Following the Government announcement, the Financial Times reported the Chancellor, Rachel Reeves, as saying that the creation of the NWF would mean reforms to BBB, so that it mobilises institutional capital “towards low-carbon investments”. 

For now, there is little detail on how this will be achieved, but a reasonable assumption would be that some of this new allocation of capital will be for funds investing in, or providing finance to, portfolio companies developing low-carbon technologies. Of particular interest to the UK SME funding ecosystem will be what this means for BBB’s existing and future allocations to the sector. More details are expected ahead of the government’s international investment summit, scheduled for the Autumn of this year.

For more information on the National Wealth Fund, check out our dedicated private capital solutions website.