Northern Gritstone rakes in £215 million to support university spin-outs in North England

Investment business focused on university spin-outs in the north of England, Northern Gritstone has announced the first close of a new fund with £215 million. The fund aims to raise up to £500 million to back early-stage businesses.

It will invest in fast-growing sectors such as advanced materials, health technology, cognitive computation and AI. To accelerate the development of a northern innovation hub to rival the U.K.’s Silicon Fen and ultimately Silicon Valley, the fund wants to tap the U.K.’s most prolific investors into academic spin-outs and intellectual property-rich businesses.

Chaired by former treasury minister and Goldman Sachs economist Lord Jim O’Neill, the fund is backed by Greater Manchester Pension Fund and West Yorkshire Pension Fund and other institutional investors.

“The strong endorsement of Northern Gritstone we’ve seen from investors is testament to the huge scale of the opportunity in northern England’s world class science and innovation hubs and the spinouts they are producing,” Lord O'Neill said.

The fund’s CEO Duncan Johnson added: “We want to boost innovative, science-led spin-outs emerging from our leading research universities and the ecosystems they support.”

Northern Gritstone’s other backers include M&G Investments, Lansdowne Partners and Andrew Law, the CEO of hedge fund Caxton Associates.