University of Oxford receives backing for £300m science venture

The University of Oxford has lined up a roster of high-profile investors to back a £300m joint venture that will develop science and technology businesses, one of the largest attempts to commercialise intellectual property in the UK.

The University and Isis Innovation, its technology commercialisation subsidiary, are partnering with a new company, Oxford Sciences Innovation, to develop research from the university's mathematical, physical, life sciences and medical sciences divisions, and commercialise their ideas into companies. The divisions will also advise companies as they grow.

OSI is raising £300m, of which £210m has been committed by six cornerstone investors. These include hedge fund Lansdowne Partners; Woodford Investment Management, an asset manager and the Wellcome Trust.

IP Group, a London-listed intellectual property business that invests in technology companies, is also backing the venture. David Norwood, who founded IP Group is also chairman of OSI.

The new venture seeks to replicate on a much larger and broader scale what IP Group did 15 years ago when it was established to provide early-stage capital to technology companies.

It also highlights how investors are increasingly looking to provide early-stage capital and scaling expertise to companies long before an initial public offering, driven by the large potential upside. OSI is expected to float further down the line.

"Spinouts based on our research have an impressive record of generating innovative breakthroughs and new employment regionally, nationally and internationally," said Professor Andrew Hamilton, vice-chancellor of the University of Oxford.

Since 2000, Isis Innovation has developed more than 100 spinout companies based on technology developed by the University of Oxford research. Examples include Oxford Nanopore Technologies, which develops genome sequencing technologies, and NaturalMotion, a British software company.

Lansdowne's veteran portfolio managers Pete Davies and Stuart Roden pioneered investing in the commercialisation of science from British universities. They were original backers of IP Group and also invested in Imperial Innovations, a technology incubator led by Imperial College.

In April, Neil Woodford, head of investment at Woodford Investment Management, raised £800m for the IPO of a new investment trust, Woodford Patient Capital Trust, which focuses on early-stage companies.

The partnership comes as the University of Oxford announced this week that a campaign to raise funds for teaching and research has surpassed £2bn - a landmark in European university fundraising history.

Credit Suisse is acting as the sole placement agent.

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