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By silicon.com, 21 December 1998 00:15

NEWS The British Venture Capital Association (BVCA) has accused pension funds of dragging their feet on venture capital investment for IT start-ups. The National Association of Pension Funds (NAPF) says its members want to invest in UK start-ups, but has had trouble finding suitable companies. NAPF says its members - who account for about 35 per cent of the stock market - want to put roughly 5 per cent of their portfolios into venture capital. John Rogers, director of investments for NAPF, said: "In the past, it's been unrealistic to expect pension funds to invest in start-up companies. The government has been encouraging pensions to stick to fixed bonds rather than equities, because they are seen to be safer. But this is changing." Venture capitalists in the UK have long argued that UK business has suffered from the City's unwillingness to take risks. The director of the BVCA, Clive Shirling, said: "We've been trying to get pension funds to put 5 per cent of their portfolios into venture capital for years. All start-ups are risky. But what the pension funds have failed to understand that while a single investment is risky, if you put 10 of them in a portfolio, the risk is diminished massively." Trade Secretary, Peter Mandelson's new white paper, released last week, has promised to encourage the City not to disregard more risky ventures.