The London Stock Exchange is plotting a £300m listed investment vehicle aimed at offering much-needed support to companies hit hard by the pandemic.
David Schwimmer, LSE chief executive, has led talks with top City figures and Treasury figures about establishing an investment trust that would list on the index.
It is understood the vehicle, dubbed the UK Growth and Resilience Fund, would mainly invest in unquoted companies.
BMO Financial Group, JP Morgan Asset Management and Octopus Ventures have been lined up to oversee three strands of investment focused on private equity, listed small-cap companies and venture capital respectively, according to Sky News, which first reported the venture.
The LSE would not be a direct investor in the fund, but would waive most of the fees typically paid by companies listed on its exchange.
It would initially aim to raise £300m but this could be expanded to £1bn, according to a fund management source.
The venture would be aimed at securing investment in unquoted companies that might otherwise struggle to raise capital amid the coronavirus crisis.
One idea under discussion is that seed funding for the initial public offering would be provided by companies that have prospered during the pandemic or received substantial government support, such as supermarkets and online retailers.
It is not clear whether any companies have been approached about their willingness to take part in the project.
Simon Fraser, a former Barclays board member and chair of the Investor Forum, has been tipped as a possible chair of the UK Growth and Resilience Fund, according to Sky News.
The fund has been framed as part of the government’s ‘build back better’ campaign, aimed at revitalising the economy as the country begins to recover from the pandemic.
Talks over the project are said to have been in progress for months and there is no certainty it will come to fruition.
Investment bankers at Barclays and Winterflood Securities have also been involved in talks about the project, according to the report.
London Stock Exchange Group declined to comment.