Milltrust International Group is an investment manager based in Singapore and London; the firm runs a raft of alternative UCITS funds which invest in emerging markets equities, and the real assets division runs two agriculture products, as the firm’s leadership has decades of experience in the space. That agriculture background provides the connection to the firm launching the British Innovation Fund (BIF), which invests into leading British University innovation venture funds and companies, as Simon Hopkins, Milltrust International’s CEO and Founder, explains.

“We, as investors in agriculture, were approached to examine whether or not we wanted to invest into one of the world’s leading animal genetics businesses. 20 years ago, scientists at Edinburgh University produced Dolly the Sheep, the first cloned animal. We looked at this opportunity which centred around creating a commercialisation vehicle for Edinburgh University’s animal science – both from the Royal (Dick) School of Veterinary Studies and from the Roslin Institute – and we negotiated the establishment of Roslin Technologies, an incorporated company which has the right to all unencumbered IP coming out of the university in this domain.”

On the surface, the BIF doesn’t seem like a typical opportunity which Milltrust, with its focus on emerging markets and agriculture, would explore. Hopkins, however, sees his firm first as an identifier of alpha-generating opportunities for their investors.

“We’re trying to operate in a number of what I call investment solutions as opposed to investment management. We’re trying to deliver where we can really add value and where there are limited numbers of other participants.”

The opportunity to launch the BIF came about quickly, but, in keeping with his ethos, Hopkins realised the scope of the opportunity.

Simon Hopkins
Milltrust CEO Simon Hopkins

“When I looked at that business [Roslin Technologies], I realised that this was a potentially very commercially interesting opportunity for investors and that the world of university venturing is a very rarefied universe of investors.”

He immediately set upon implementing a broader strategic plan.

“There were other universities’ venture funds that had really come into existence only in the last few years but were attracting quite a lot of attention, and we decided to cast our net wider and explore whether or not we could create a vehicle to invest across university venturing on a national scale.”

That exploration led swiftly to conversations with some of the leading universities in the U.K.

“Our first conversations were of course with Oxford University, Cambridge University and London University. We ended up investing with Cambridge and Oxford, very quickly putting together a concept called the British Innovation Fund and getting backing from a number of investors including the Berkshire County Council pension plan.”

Launched at the end of 2016, the BIF’s current underlying portfolio is split between four investments: Roslin Technologies, which also counts Hong Kong-based PE shop JB Equity as an investor; Oxford Sciences Innovation (which is also the world’s largest university innovation company), which boasts Google Ventures, IP Group, Temasek and Oman Investment Fund as cornerstone investors; Pragmatic Printing, a manufacturer of low-cost flexible integrated circuits which is backed by Cambridge Innovation Capital and Attomarker, a University of Exeter spin-out which has a device that performs blood testing by plugging a device into a smart phone to give blood test results in less than 10 minutes. The fund currently runs some £30mn with plenty of spare capacity.

“We have no capacity constraints per se as we do have a significant pipeline. However, as this is not a huge asset class we would envisage raising an additional £50mn and taking the fund to £80mn of committed capital” says Hopkins.

Hopkins and his team are already having conversations with other universities like Warwick, Leeds and Stirling as they seek additional investment opportunities.

One of the attributes of the British Innovation fund is that it’s not closed-ended. Hopkins explains why he takes a longer-term view.

“A closed-end fund – the conventional venture capital model – is something that I think, as a model, has been under considerable criticism because of the pressure of venture capitalists and private equity investors to sell investments or even close down investments that don’t achieve the desired IRR targets. Our investment philosophy is that we are investing for the long term in early stage businesses in an open-ended structure, and that structure will ultimately list. When we’ve got to the size which we think is suited to a listing, the likelihood is that we will list in the UK.”

The fund is structured as a segregated portfolio company. It’s an entity that can at some point list; it is structured as an Irish Collective Asset Vehicle (ICAV)and fully AIFMD compliant. but isn’t for retail distribution.

Hopkins is vividly enthusiastic about the long-term opportunity for the BIF.

“There are pockets of excellence and interesting things going on in a lot of regional universities in the UK. Whilst not everything is state of the art, invariably you find interesting scientists and we do focus on science and technology doing very exciting work. I was looking at a list of 50 innovations, scientific breakthroughs that have come out of UK universities; it’s quite remarkable what technologies and scientific innovations have come out of the UK that one can point to; cloning being just one of them.”