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Quester wins new university fund mandates

Quester has overcome strong competition to win two of the fund management mandates in the second round of the University Challenge Seed Fund (UCSF) initiative, worth GBP8 million. The VC will undertake the management of a GBP4 million new fund on behalf of a group of five East Midlands universities and an additional GBP4 million contribution to the existing fund for the universities of Bath, Bristol and Southampton.

Iain Wilcock, a Quester director, said: “The appointments enhance our university links and our commitment to facilitating the commercial exploitation of world-class research being carried out in the UK. We expect the UCSFs to generate some attractive investment opportunities for specialist early stage venture capitalists such as Quester.”

Since its launch in March 1999, the University Challenge Seed Fund programme has provided funding of GBP75 million to help UK universities spin out commercially viable research projects. The first round of funds, capitalised by the UK government, the Wellcome Trust and the Gatsby Charitable Foundation created 15 seed funds. The second round, the results of which were announced in October, established four new funds and allocated additional cash for one of the existing funds.

The universities of East Anglia, Surrey and Dundee led consortiums that will also benefit from second round awards from the UCSF programme. The Dundee group, which includes Aberdeen and St Andrews, expects to appoint a manager in February and a similar announcement is expected from the East Anglia consortium (Sainsbury Laboratory, University of Essex, Institute of Food Research, John Innes Centre and Plant Bioscience Ltd) in the next three months. The Surrey-led group (Brunel, Royal Holloway, Sussex and Reading) has chosen a preferred manager and is finalising terms at the moment.

The new fund, named after Lachesis, one of the Greek goddesses of the Fates, will finance research from the universities of Loughborough, Leicester, Nottingham, de Montfort and Nottingham Trent. Quester expects half of the GBP4 million to be invested in pharmaceutical research, healthcare and medical technologies (specialities of Leicester and Nottingham), with engineering and materials also prominent due to the expertise of Loughborough, deMontfort and Nottingham Trent.

Quester will also manage the additional GBP4 million awarded to the Sulis Seedcorn fund for the universities of Bath, Bristol and Southampton. The investor has been responsible for this fund since its inception in December 1999. At GBP9 million the Sulis fund is now the largest UCSF.

Quester manages a total of GBP24 million for nine universities, which include Oxford, Birmingham & Warwick, as well as those that received new funding at this time. These funds account for more than a fifth of the total annual research income of the UK universities. Over all, the company has a around GBP250 million under management and is currently raising its fifth Venture Capital Trust.