Recent proposals to change the way some UK pension funds are invested, including the Mansion House Accord and the creation of consolidated megafunds, aim to support pension schemes in exploring greater investment in UK growth assets. One sector well-positioned to benefit is Britain’s growing cohort of high-quality deep technology companies.
Deeptech businesses are at the frontier of innovation, often requiring scientific and technological breakthroughs prior to commercialisation.
Their complexity and long development timelines demand patient capital; a characteristic that aligns naturally with the long-term horizon of private markets.
With the right access, pension fund investment managers can tap into this dynamic sector, potentially delivering strong, sustained returns for scheme members. And this is a growing market; in 2024, UK deeptech companies attracted $4.2bn in venture capital investment, a 21 per cent increase year-on-year, according to the European Deep Tech Report 2025.
Quantum computing is a breakthrough technology with the potential to transform industries, from financial modelling and cyber security to drug discovery and life sciences.
While not yet mainstream, progress is accelerating, and the next decade is expected to bring significant commercial impact. As with the current wave of AI adoption, early engagement in quantum could position investors to capture outsized long-term returns.
Historically generalist investors have limited their exposure to deeptech due to a lack of familiarity with the underlying technologies, particularly in areas like quantum computing, where the science is complex.
Concepts such as qubit counts or coherence times may seem impenetrable without a technical background in the field. The solution lies in experienced asset managers with deep expertise in the underlying technologies and the ability to construct a diversified portfolio that spreads risk across multiple technologies.
Once this barrier is overcome, deeptech, including quantum, can play a valuable role in a diversified portfolio, offering the potential for strong, risk-adjusted returns over the long term.
Quantum capital allocation strategy
A successful quantum capital allocation strategy depends on partnering with specialist fund managers who have the expertise to navigate this complex but promising space.
Encouragingly, the UK now has a growing ecosystem of deep tech investment professionals capable of building diverse portfolios, managing risk effectively, and identifying high-potential opportunities.
The increasing maturity of the sector, coupled with a strong UK talent base, makes now a compelling moment to explore allocation. For institutional capital, this provides a robust and increasingly accessible route to capture long-term, risk-adjusted returns from one of the most transformative technologies of the future.
As pension funds gain more access to these opportunities, enabled by a growing base of experienced managers, improved private market liquidity and the collaborative development of supportive fund structures such as LTAFs, their participation has the potential to transform the availability of scale-up capital in the UK.
This, in turn, could accelerate the growth of breakthrough technologies and deliver meaningful long-term value for scheme members.
Ian Lane is a partner at Cambridge Innovation Capital