Imperial Innovations Group plc (AIM: IVO, ‘the Group’, ‘Innovations’) has committed £24.75 million to the new UCL Technology Fund (‘the Fund’) launched today. This is the first investment fund that UCL (University College London) has established to commercialise its multidisciplinary research.
Over the next five years the Fund is expected to invest up to £50 million to support ideas from academics in life sciences and physical sciences, and will be used for early-stage proof of concept funding, licensing opportunities and the formation of new spin-out companies.
As a limited partner (LP), Innovations has committed £24.75 million to the Fund, matched by a commitment in the same amount from the European Investment Fund.
Russ Cummings, Chief Executive Officer at Imperial Innovations, said:
“Innovations’ participation in the Fund is expected to significantly increase the Group’s access to deal-flow from one of the world’s leading universities and provide new opportunities to apply our skills and investment capital.
“The quality of research at UCL means that there is already a wealth of opportunities to be exploited and the UCL Technology Fund will provide even greater level of resources to UCL Business to increase throughput.
“We expect our participation in this new fund will lead to a significant increase in our rate of investment in UCL-related spinouts to which we will have access via our role in this new fund.
“As well as enhancing the opportunities from UCL, we are signalling a step-change in our support to commercialise the outstanding research output from the UK’s elite universities. This is a new, collaborative model that could be replicated with other universities.”
Piyush Unalkat, Head of Technology Transfer Investments at the European Investment Fund added:
“Innovations is one of Europe’s most knowledgeable operators in the commercialisation of research and the EIF is privileged to have such a qualified co-investor in the Fund, bringing more than just capital.
“UCLB is one of the most established Technology Transfer Offices in the UK, with access to an enviable pool of world class research, which is a critical and defining success factor for this type of commercialisation fund. The Fund Manager, Albion also brings extensive experience from early-stage investing across a variety of sectors.
“I believe that all the elements for a sound new fund are in place and welcome the beginning of a long and fruitful relationship with Innovations, a like-minded and patient long-term co-investor.”
The Fund will be managed by Albion Ventures LLP (‘Albion’), a UK venture capital investor, which is also contributing to the Fund. Albion will draw substantively on the experience of the UCL’s technology transfer company UCL Business (‘UCLB’) to ensure the Fund meets certain financial targets as well as objectives set by UCL for broader society and economic impact. UCLB is technical advisor to the Fund and in that capacity will provide services including origination of projects, project design, and management of proof-of-concept projects and licensing activity.
Under the Project Access Agreement, UCLB has, subject to limited exceptions, an obligation to provide details to the Fund of all the projects it has access to from UCL's research base, to promote the Fund within UCL and to work with Albion to develop projects into spin-out companies or licensing opportunities.
Under the Fund's limited partnership agreement, the Fund's general partner (GP) has obligations to use all reasonable endeavours respectively to offer co-investment opportunities to the LPs, to alert them to any projects that the Fund chooses not to invest in, and to negotiate the right for LPs to take up any of the Fund's pre-emption rights that the Fund does not take up. As a result, in addition to its £24.75 million commitment to the Fund, the expectation is that Innovations will also have opportunities to make direct investments into selected UCLB spin-outs to support their long-term growth and value creation. Innovations will be entitled to appoint a representative to the Fund's advisory board.
Albion and UCLB will share management fees (2.4% per annum of total commitments during the investment period and invested capital after the investment period) and carried interest of 20% of realised profits of the Fund once the LPs have received distributions equal to 120% of their commitments.
The Fund will have an investment period of five years and a term of ten years (subject to extension by up to a further two years) from the date of admission to the Fund of the first LP other than the original founder partner.