In a strategic move to diversify its investment portfolio, Phoenix Group, the UK’s leading savings and retirement business, has acquired a stake in the London-based venture capital firm, Hambro Perks. This acquisition aligns with Phoenix’s objective to provide its customers with increased opportunities in rapidly expanding private enterprises.

Phoenix Group’s acquisition comprises a 5% stake in Hambro Perks’ holding entity, with an option to double this stake in the future. While the specifics of the agreement remain confidential, the investment originates from Phoenix’s With Profits funds.

James Mitchell, Phoenix’s head of strategic partnerships, highlighted the importance of this move, stating, “With many companies choosing to remain private for extended periods, it’s essential to provide access to these private markets, ensuring diverse investment opportunities.”

This strategic decision by Phoenix mirrors the broader UK trend of transitioning from defined benefit pension schemes to defined contribution (DC) schemes. Industry leaders and the UK government are advocating for increased investments in private assets, such as unlisted equities, to potentially offer higher returns for long-term investors.

Earlier in the year, Phoenix, along with other prominent UK pension providers, pledged to allocate 5% of their default funds for DC pension investors to unlisted equities by the end of this decade. This initiative was part of a series of reforms introduced to enhance pensions and stimulate investment within the UK.

Currently managing assets worth £259bn and serving 12 million customers, Phoenix has previously invested in Hambro Perks funds. However, this recent investment signifies a unique collaboration between the two entities.

This partnership positions Phoenix as one of the major shareholders in Hambro Perks. The venture capital firm, established a decade ago, boasts investments in over 100 companies, spanning various sectors from biotech to fintech.

Andrew Wyke, CEO of Hambro Perks, viewed Phoenix’s investment as a testament to the firm’s robust business model and leadership. He emphasized the company’s commitment to backing innovative technology startups and its diverse investment strategies, including a focus on emerging environmental technologies.