Investing in the Arc’s Propensity to Innovate
Three part Q&A with Pete Gladwell, Group Social Impact and Investment Director, Legal & General
1. L&G is one of the pioneers of 'inclusive capital’ and has championed social impact investing as a way to address key societal challenges. What has L&G's involvement in the growth and prosperity of the Oxford-Cambridge Arc looked like in past and present, and how will investment factor into this development in the future?
It goes without saying that L&G has invested a lot in both Oxford and Cambridge over the years. In 2019, we signed a £4bn 50:50 partnership with Oxford University to build homes, workspaces, and research facilities for thousands of new staff and students. We’ve also invested heavily in Cambridge Science Park, providing the essential funding to science and innovation districts which power national prosperity.
‘Inclusive capital’ is about putting money to work in a way which helps to build better societies. Across the Oxford-Cambridge Arc, we see opportunities to invest in emerging technologies and regional development which supports and accelerates R&D in the region, which is fundamental to solving some of the biggest global challenges we face today, like the climate emergency, the skills and infrastructure gap, and social inequalities.
2. How have these initiatives engaged the social growth of the Arc?
When L&G make investments, we’re keen to locate both the areas of greatest need. We also target opportunities where wider societal returns will be strongest, screening for positive social impact which lasts.
Across the Arc there is a clear need for social housing. Funding can also help nurture and support nascent start-ups and university spinouts which strive to generate world-leading social impact, like Oxford Photovoltaics – a company pioneering new silicon solar solutions to make solar energy more affordable in the transition to an all-electric world – which we invested into alongside Oxford University Innovation, Innovate UK, the European Investment Bank, and Engineering and Physical Sciences Research Council, among others.
By taking an inclusive capital approach, investment has generated more jobs in the Arc in the areas of growth which serve to catalyse societal advancement.
3.What sort of public infrastructure does L&G invest in? Is investment in hospitals and healthcare, schools and education, as well as public utilities, overlooked in terms of what's required to supercharge the Oxford-Cambridge Arc's growth?
L&G invests in hospitals, healthcare and education collaboratively with the public sector. We see our greatest social impact when we are a partner, and we’re in discussions with HM Treasury and Homes England to explore new funding models for joint public-private investment to drive greatest national outcomes at the same time as realising strong and consistent returns.
The Arc is a great example of where social impact investing has already borne fruit, realising 15-20% returns annually in the region. We’ve been able to invest across physical, financial, legal and digital infrastructures, to help develop and reinforce the innovation occurring in the Arc.