UKTI Innovation Gateway

1. UKTI Innovation Gateway
UKTI can help innovative,
£20M+ projects pitch to
Sovereign Wealth and Pension Funds

2. UKTI is the UK Government Department
responsible for international trade and
investment. We work with:
• UK based businesses to ensure their
success in international markets
through exports.
• Overseas companies to look at the UK
as the best place to invest, set up or
expand their business.
UKTI

3. The UK Strategic Opportunity
The opportunity cost of the ‘gap’ between international perceptions and reality is estimated to
be worth up to £3.6bn p/a in unrealised trade and investment.
WeaknessesStrengths
Opportunity
• UK is No 2 in the 2014 Global
Innovation Index (WIPO 2014)
• 2nd internationally for business-
university collaboration (WEF, 2013)
• Sustains the most ‘impactful research
base in the world’ (Elsevier 2013)
• Protected the £4.6bn research budget
• Created £1.5bn network of ‘catapult‘
collaboration centres
UKTI-commissioned research (2013) shows that UK
innovation is still seen internationally as world leading
but is:
• Seen as weak in commercialisation.
• Comparatively cash poor with even a protected
science budget reducing in real terms due to
inflation by up to 20% and a VC market skewed
towards early stage finance, presenting a
strategic investment opportunity.
• Composed of strong individual bodies it can
appear complex

4. UKTI Innovation Gateway
1
Institutional Investors
Attract investment from institutional investors through tailored ‘pitchbooks’ of UK investment ready Science
and Innovation projects
2
Venture Capital
To attract larger Venture FDI to UK and investment into funds
3
Target Large Corporates with Innovation offer
Secure increased R+D presence from large corporates by more effectively selling the breadth of UK tech /
innovation SMEs / research base
4
FDI / Trade Strategy and Campaign work
For four of the 8 GREAT technologies: Space, Robotics and Autonomous Systems, Advanced Materials and
Synthetic Biology support definition and delivery of their international trade and FDI strategy.
The work of the Innovation Gateway falls into four core work-streams:
The international ‘front door’ to commercial opportunities in the UK’s innovation system

5. Investor Classes
• UKTI has relationships with Sovereign Wealth Funds, Institutional Finance
providers, / High Net Worth's / Family Offices through our global network of
colleagues in overseas Posts and HQ based relationship management teams.
• The Innovation Gateway Team holds relationships with UK based Venture
Capital funds and senior relationship with 80 of the largest global Corporate
VC’s.

6. Investor Class Breakdown
Investor
Type
Risk Appetite Indicative
Bite-size
Investment preferences and expected returns
Venture
Capital
High risk £0-10m • Early stage technologies
• Investment can be driven by strategic reasons or purely financial returns
• Will not expect return on investment on every deal. Average return is 1
success in 10 investments.
High Net
Worth
Individual /
Family
Offices
Low-High Risk £0-500m • Early or late stage technologies
• Potential interest in package deals
• Will move into philanthropic territory for opportunity that meets their
personal interest (which may have potential socio-economic benefits
globally or to home country/region)
• Known interests in clean-tech and agri-tech for example.
Sovereign
Wealth
Fund
Low Risk
preference:
potential for
High: Low risk
blends
£10-500m • Later stage technologies and package deals
• Will look for commercial return on investment (see slide at end of deck
for illustrative returns)
• However, some SWFs may accept lower return on investment for
potential socio-economic returns.
Pension
Fund
Low Risk £50-500m • Later stage technologies/companies.
• Will only take commercial return on investment
• Traditionally low risk investors e.g. real estate, infrastructure and bonds.
*These are a rough approximation of investor preferences, boundaries may
change for a deal meeting niche investor interests.

7. Owned by government of sovereign states
For the benefit of current and future generations.
Often created from surplus foreign exchange and reserve
assets accrued from the export of natural resources or large
current account/budgetary surpluses.
72 SWFs actively investing today.
(IMF)
Aggregate amount of assets under management $5.4 trillion
(Preqin SWF Report 2014)
80% ($4.3 trillion) of these funds held only 6 countries.
Introduction to Sovereign Wealth Funds (SWF)

8. Our SWF EngagementApproach
UAE ADIA, Mubadala, ADIC
Qatar QIA, QH
Canada CPPIB, Caisse, OTTPB, OMERS
China CIC
Singapore Tamasek, GIC
Netherlands National Civil Pension Fund
South Korea KIC
Kuwait KIA/KIO
Australia Australian Govt Future Fund
USA Calpers & Teachers
…. + constantly expanding and exploring

9. Sovereign Wealth and Pension Funds invest for the longer term and
seek to make investments of at least £50-100m typically.
Our initial understanding of criteria for investment are that a project
must:
• Be commercially viable and stand up to due diligence. (ROI could
be offered through Joint Venture, Bonds, Equity or Debt)
• Build on existing globally recognised academic or commercial
strengths, by association or location.
• Address the global marketplace or an investor’s domestic
needs.
• Existing government support or co-investment/location with
global businesses or brands will be looked upon favourably from
a commercial perspective.
SWF Investment Behaviour

10. Balancing Innovation and Risk
Bonds/Real Estate
Development
Breakthrough
Technology
Requiring High
Capital
A stronger investment risk profile might be achieved through a
balanced package proposition
Business
Growth

11. What might an investable project look like?
There is no ‘right answer or model’ as each investor has individual
preferences and these are not always clear in specific detail. A project
could contain one of more of the following elements:
 A business with an innovative product
 A research + commercialisation activity
 Seeking financing of debt/equity for capital and growth
 Plus student or Hotel Accommodation adjoining (or within) for
visitors or local commercially linked needs.

12. • Require £20M+ debt/equity financing
• Compelling and convincing – a clearly communicable
market requirement or opportunity
• Progressed to a suitable stage
• Strong team involved to deliver the project through to
success
• Financial plus other returns to the investor
Threshold Criteria, from experience to date

13. Typical information we need
• Details of the Innovation – the existing or resulting science or technology and
benefits arising
• Organisation track record to date, revenues, investment, IP, business model
• How sales will be generated/intermediaries/partners/sales team
• Activities with key markets, orders, geographies, pipeline
• Sales, Costs, EBITDA, projections.
• Finance/investment sought, already secured, use of funds: e.g. people (who &
why), equipment, international expansion.
• Returns to an investor, what form, timing, %ROI

14. 1. UKTI explores ideas and reviews potential companies
and projects
2. Organisations provide their pitch material. UKTI can
offer comments that might help
3. Pitch materials are to suitable investors by UKTI team in
the UK and overseas
4. 121 introductions and meetings are arranged between
projects/companies and investors that wish to know
more.
What UKTI does

15. Next Steps
• Shape projects and plans
• See if we can help
• Develop proposals in line with the UKTI template document.
• Develop pitch material
Key contacts
James Dancy
James.Dancy@ukti.gsi.gov.uk
Roy Williamson
Roy.Williamson@uktivc.com