MARKET REPORT: City duo crew as much as inject £20bn into UK start-ups

Even after Jeremy Hunt received a roasting from his Labour successor Rachel Reeves this week, the former’s chancellor’s plan to ramp up investment into fast-growing private companies got a boost from news that two FTSE 100 firms are teaming up to promote it.

Life insurer Phoenix Group and fund manager Schroders have agreed to launch an investment manager called Future Growth Capital (FGC) to promote the objectives of Hunt’s Mansion House Compact and funnel £20billion of pension cash into private markets.

This was a proposal made last summer by Hunt that called for the UK’s major pension funds to invest 5 per cent of their cash into unlisted companies.

Pension power: Life insurer Phoenix Group and fund manager Schroders have agreed to launch an investment manager called Future Growth Capital

Phoenix said it is buying into this commitment by deploying an initial £1bn now and up to £2.5billion over three years, with the aim to deploy £10billion to £20billion of investor funds over the next decade via the FGC joint venture.

Phoenix rose 0.9 per cent, or 5p, to 547p and Schroders added 0.4 per cent, or 1.4p, to 392.8p.

UK-listed stock benchmarks bounded up to two-month highs ahead of the latest Bank of England monetary policy decision, even though the chances of a reduction in interest rates remains on a knife edge.

The FTSE 100 gained 1.13 per cent, or 93.57 points, to 8367.98. The FTSE 250 was ahead 0.78 per cent, or 168.2 points, at 21,600.71. 

Heavyweight commodity issues provided the fuel for the blue-chip gains. 

Stock Watch – Genedrive

Genedrive secured a recommendation from the National Institute for Health and Care Excellence (NICE).

NICE agreed that the company’s test kits should be used to guide Clopidogrel drug use after an ischaemic stroke or transient ischaemic attack and be the test of choice for point-of-care strategies. 

The ID test uses a non-invasive cheek swab, which helps clinicians optimise treatment plans for stroke patients.

Genedrive shares jumped 8.6 per cent, or 0.33p, to 4.13p.

Oil giants were in demand as crude prices rallied, with BP up 1.6 per cent, or 7.2p at 458.85p following well-received results. Shell, which reports first half numbers today, added 2.7 per cent, or 73.5p, to 2840p.

Miners also traded higher as gold prices rose. 

Endeavour Mining lost 0.6 per cent, or 10p, to 1730p despite saying it will pay out a minimum of around £339million in dividends over the next two years and more if special payments and share buybacks are included.

The FTSE 100-listed miner reported a decline in first-half earnings and gold production, but said it expects full-year output to beat that of last year.

Away from commodities, Metro Bank leaped 30.1 per cent, or 12.1p, to 52.3p as it forecast a return to profit in the fourth quarter following cost-saving measures during the year and a cash injection from the sale of its residential mortgage book to NatWest (up 0.4 per cent, or 1.4p, to 368.1p).

Investment group Rathbones rose 7.5 per cent, or 134p, to 1924p as it posted a jump in first-half profit and funds under management and said it was ahead of its objectives after a merger with Investec Wealth & Investment.

Housebuilder Taylor Wimpey added 0.5 per cent, or 0.8p, to 159.35p after it reported underlying profits ahead of expectations but made an increased cladding fire safety provision of £88million.

Ahead of more results from big US tech, AIM-listed chip components firm IQE gained 6.3 per cent, or 1.85p, to 31.15p on news it is planning an initial public offering (IPO) for its Taiwanese business on the Taiwan Stock Exchange.