Not only did Chancellor of the Exchequer, Phillip Hammond, announce a £23bn National Productivity Investment Fund to be spent on innovation and infrastructure over the next five years, he confirmed further investment into R&D by the government rising to an additional £2bn per year by 2020/21.
And, he added, in an attempt to tackle the “longstanding problem of our fastest growing technology firms being snapped up by bigger companies, rather than growing to scale” he said he would: fund a business-led initiative to boost management skills across British business; inject a further £400m into venture capital funds through the British Business Bank; and launch a Treasury-led review of the barriers to accessing patient capital in the UK.
Given that Woodford and a number of ‘early stage companies’ met with cabinet secretary, Sir Jeremy Heywood earlier this month, to discuss “the importance of patient capital” the phrasing was no accident.
Indeed, Hammond’s statement: “we must build on our strengths in science and tech innovation to ensure the next generation of discoveries is made, developed and produced in Britain” chimes well with the way in which Woodford Investment Management’s CIO has spoken about the goals behind the Patient Capital Trust.
And, as Portfolio Adviser has written before, this type of investment strategy can work very well over time. But, it does require a lot of patience.
According to Hammond, such measures are vital if the UK is to improve productivity and achieve the high skill, high wage economy it longs to have. The trick, of course, is going to be in matching up the image of the type of economy the government wants with the one it currently has, especially outside of London, which is no small feat in and of itself.
But, in the meantime those with capital and the ability wait for this vision to edge closer to fruition could stand to benefit.
As Fundcalibre MD, Darius McDermott pointed out: “The tail of his [Woodford’s] open-ended fund and his investment trust may well benefit from the increased support and funding for this area of the UK economy.
