British Business Bank list of 696 companies in which the Future Fund has an equity interest
The British Business Bank has published a list of 44 additional companies in which the Future Fund holds an equity interest, taking total equity holdings to 696 as at 31 December 2023.
The rate of conversions in Q3 2023/4 was lower compared to the previous quarter, with 44 new equity interests. In contrast, the number of insolvencies this quarter was higher than the previous quarter, with 27 new insolvencies added. This sustained level of corporate activity is in part due to outstanding Future Fund loans nearing their three year maturity date. All of the companies with outstanding loans have been contacted to set out the options available to them. As at 12 January 2024, 97 loans have been extended by up to two years.
Companies in which the Future Fund now holds an equity interest include Liverpool-based Enteral Access Technologies, a medical device developer that provides clinicians with tools to safely place gastric feeding and decompression tubes; Belfast-based Cumulus Neuroscience that has developed an at-home, medical grade, flexible data collection and analytics platform to help solve challenges in monitoring functional brain health and brain disorders; and Mishipay, an RFID tag-based technology company that lets shoppers scan and pay for shopping with smartphones.
Ken Cooper, managing director, Venture Solutions, British Business Bank said: “The Future Fund was created to ensure a flow of capital, at the height of the pandemic, to companies that would otherwise have been unable to access government support schemes, while ensuring long-term value for the UK taxpayer. We are pleased to see so many more of those companies now going on to raise further private sector capital, which will allow the Future Fund to benefit from their progress.”
Launched on 20 May 2020, and open for applications until 31 January 2021, the Future Fund issued 1,190 companies with convertible loans worth £1.14bn in total. Third-party investors were required to at least match the Future Fund’s investment.
The Future Fund supported UK companies that typically rely on equity investment to fund their growth. By creating a bridge to the next equity funding round, the Future Fund supported these companies through a period of considerable economic disruption and now the recovery.
The scheme used a recognised financial instrument known as a convertible loan. Unlike an equity investment, there wasn’t a requirement under the convertible loan to value the company or the price of its shares, at a time when company valuations had been significantly impacted by Covid-19. Instead, the convertible loans are designed to convert into equity either at the next equity funding round or if the company is acquired through a sale or IPO.
Breakdown of the total portfolio as at 31 December 2023
| As at 31 December 2023 Number of investments (Original loan value) | Previous Quarter Number of investments | Change since previous quarter Number of investments | ||
| Loans | 260* | £242m | 329 | -69 |
| Equity interests | 696 | £691m | 661 | 35 |
| Cash realisations | 62 | £53m | 55 | 7 |
| Insolvencies | 173 | £151m | 146 | 27 |
| Total | 1,191 | £1,137m | 1,191 | |
* Up to 12 January 2024, 97 loans had been extended by up to two years. Of these, 9 loans subsequently changed category to “equity interest”, “cash realisation” or “insolvency”. This table shows the composition of the portfolio as at 31 December 2023.
Reconciliation of equity interests since last quarterly update
| Total | |
| Previous published number of equity interests | 661 |
| Companies removed from list of equity interests | -9 |
| New conversions of loans into equity interests | 44 |
| Total | 696 |
Explanatory notes:
Loans: the number of Future Fund investments in the form of a convertible loan.
Equity interests: the number of Future Fund investments in the form of a share. These arise primarily as a result of a convertible loan converting into shares following a financing event. Equity interests also arise following a sale or an IPO in which investors, including Future Fund, receive share consideration in the form of shares in the acquiring entity.
Cash realisations: the number of Future Fund investments that have been realised for cash as a result of a company being acquired. Consequently, the Future Fund no longer holds an Equity Interest or a Loan in those companies.
Insolvencies: the number of Future Fund investments in respect of companies which have entered administration, liquidation or another formal insolvency process as disclosed in Companies House filings.
Please note that the original number of Future Fund investments increased from 1,190 to 1,191 as a result of a demerger of one company.
The British Business Bank will update the list of companies in which the Future Fund has an Equity Interest and the list of companies which have entered insolvency at the end of each financial quarter – the full list is available here.
